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Chapter 1 (ALL DISTRIBUTOR, RETAILER, MICROBUSINESS, CANNABIS EVENT ORGANIZER, CANNABIS EVENT, AND TESTING LABORATORY LICENSES) of the Department of Cannabis Control ("Department" or "DCC") Text of Regulations covers regulatory compliance requirements applicable to all Bureau licensees. Regulations specific to each license type (Cannabis Retail, Cannabis Distribution, e.t.c.) are covered in subsequent chapters of the Text of Regulations.
For the purposes of this division, the definitions in this section shall govern the construction of this division unless otherwise indicated.
§ 15000 (a) “Act” means the Medicinal and Adult-Use Cannabis Regulation and Safety Act.
§ 15000 (b) “Branded merchandise” means clothing, hats, pencils, pens, keychains, mugs, water bottles, beverage glasses, notepads, lanyards, cannabis accessories, or other types of merchandise approved by the Bureau with the name or logo of a commercial cannabis business licensed pursuant to the Act. Branded merchandise does not include items containing cannabis or any items that are considered food as defined by Health and Safety Code section 109935.
§ 5000 (c) “Bureau” means the Bureau of Cannabis Control, previously named the Bureau of Marijuana Control, Bureau of Medical Cannabis Regulation, and Bureau of Medical Marijuana Regulation.
§ 5000 (d) “Business day” is a day Monday through Friday from 8:00 a.m. to 5.00 p.m. Pacific Time, excluding state holidays, during which the Bureau is closed for business.
§ 5000 (e) “Cannabis accessories” has the same meaning as in Health and Safety Code section 11018.2.
§ 5000 (f) “Cannabis goods” means cannabis, including dried flower, and products containing cannabis.
§ 5000 (g) “Cannabis waste” means waste that contains cannabis and that has been made unusable and unrecognizable in the manner prescribed in section 5054 of this division.
§ 5000 (h) “Canopy” means the designated area(s) at a licensed premises that will contain mature plants at any point in time.
§ 5000 (i) “Delivery employee” means an individual employed by a licensed retailer or licensed microbusiness authorized to engage in retail sales who delivers cannabis goods from the licensed retailer or licensed microbusiness premises to a customer at a physical address.
§ 5000 (j) “Free cannabis goods” means any amount of cannabis goods provided to any person without cost or payment or exchange of any other thing of value.
§ 5000 (k) “Immature cannabis plant” or “immature plant” means a plant that is nonflowering and is shorter and narrower than 18 inches. For purposes of this division, this definition is applicable to retail activities.
§ 5000 (l) “Kief” means the resinous trichomes of cannabis that have been separated from the cannabis plant.
§ 5000 (m) “Limited-access area” means an area in which cannabis goods are stored or held and is only accessible to a licensee and its employees and authorized individuals.
§ 5000 (n) “Lot number” or “batch number” means a distinctive group of numbers, letters, or symbols or any combination of these that is unique to a group of cannabis goods.
§ 5000 (o) “Medicinal cannabis patient” includes both a qualified patient as defined in Health and Safety Code section 11362.7 and a person in possession of a valid identification card issued under Health and Safety Code section 11362.71.
§ 5000 (p) “Package” and “Packaging” means any container or wrapper that may be used for enclosing or containing any cannabis goods for final retail sale. “Package” and “packaging” does not include a shipping container or outer wrapping used solely for the transport of cannabis goods in bulk quantity to a licensee.
§ 5000 (q) “Pre-roll” means any combination of the following rolled in paper: flower, shake, leaf, or kief that is obtained from accumulation in containers or sifted from loose, dry cannabis flower or leaf with a mesh screen or sieve.
§ 5000 (r) “Promotional materials” means any form, letter, circular, pamphlet, publication, or other written material directed to a customer or prospective customer to induce retail sales. Promotional material does not include permitted signs, displays, decorations, cannabis accessories, or cannabis goods furnished by a licensed cultivator, licensed manufacturer, licensed distributor, licensed microbusiness, or licensed cannabis event organizer to a retail licensee for advertising purposes. Promotional materials shall have no intrinsic or secondary value.
§ 5000 (s) “Publicly owned land” means any building or real property that is owned, leased, or occupied by a city, county, state, federal, or other government entity.
§ 5000 (t) “Residential area” is an area that is within 600 feet of any single-family or multifamily residence, other than commercial hotels, motels, and similar establishments for temporary lodging.
§ 5000 (u) “Retail area” means a building, room, or other area that is open to the public, upon the licensed retailer or licensed microbusiness premises authorized to engage in retail sales in which cannabis goods are sold or displayed.
§ 5000 (v) “Sublet” means to lease or rent all or part of a leased or rented property.
§ 5000 (w) “Tamper-evident” means that the cannabis goods packaging is sealed in a manner that prevents the packaging from being opened without obvious destruction of the seal.
§ 5000 (x) “Transport” means the physical movement of cannabis goods from one licensed premises to another licensed premises.
§ 5000 (y) “Vehicle alarm system” is a device or series of devices installed to discourage theft of the vehicle or its contents and is intended to summon general attention or to summon law enforcement as a result of an indication of an attempted breach of the vehicle.
§ 5000 (z) “Wholesale cost” has the same meaning as in regulation adopted by the California Department of Tax and Fee Administration for cannabis taxes.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26013, Business and Professions Code.
§ 5001 (a) A temporary license is a conditional license that authorizes the licensee to engage in commercial cannabis activity as would be permitted under the privileges of a non-temporary license of the same type. A temporary licensee shall follow all applicable rules and regulations as would be required if the licensee held a non-temporary license of the same type.
§ 5001 (b) A temporary license does not obligate the Bureau to issue a non-temporary license nor does the temporary license create a vested right in the holder to either an extension of the temporary license or to the granting of a subsequent non-temporary license.
§ 5001 (c) A temporary license issued under this section shall be valid for 120 days from the effective date. No temporary license shall be effective prior to January 1, 2018.
§ 5001 (d) A temporary license may be extended by the Bureau for additional 90-day periods if a complete application for an annual license has been submitted to the Bureau pursuant to section 5002 of this division prior to the initial expiration date of the temporary license.
§ 5001 (e) The Bureau shall not issue any temporary licenses or extensions after December 31, 2018. Any temporary license issued or extended with an expiration date after December 31, 2018, will be valid until it expires, but shall not be extended beyond the expiration date.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26012, Business and Professions Code.
§ 5002 (a) Applications may be completed and submitted online at www.bcc.ca.gov or completed in hard copy and submitted by delivering a printed copy to the Bureau’s office(s).
§ 5002 (b) Applicants who submit their applications online shall first register for a user account. To register for a user account, the applicant shall do all of the following:
(1) Create a user name, password, and security question and answer;
(2) Provide an email address; and
(3) Provide the owner’s first and last name, primary phone number, social security number or individual taxpayer identification number, date of birth, and mailing address.
§ 5002 (c) An application must be completed by an owner as defined by section 5003 of this division. An application must be submitted to the Bureau for each location and each license type. An application for an annual cannabis license includes the following:
(1) The name of the applicant. For applicants who are individuals, the applicant shall provide both the first and last name of the individual. For applicants who are business entities, the applicant shall provide the legal business name of the applicant.
(2) If applicable, the business trade name (“DBA”) of the applicant.
(3) The commercial cannabis license that the applicant is applying for, and whether the applicant is requesting that the license be designated as medicinal, adult-use, or both. Testing laboratory applicants do not have to designate medicinal or adult-use, as testing laboratory licenses allow the holder to test both medicinal and adult-use cannabis.
(4) Payment of an application fee pursuant to section 5014 of this division.
(5) Whether the owner is serving or has previously served in the military. Disclosure of military service is voluntary. An applicant who has served as an active duty member of the Armed Forces of the United States and was honorably discharged and who can provide evidence of such honorable discharge shall have his or her application expedited pursuant to Business and Professions Code section 115.4.
(6) A list of the license types and the license numbers issued from the Bureau and all other state cannabis licensing authorities that the applicant holds, including the date the license was issued and the licensing authority that issued the license.
(7) Whether the applicant has been denied a license or has had a license suspended or revoked by the Bureau or any other state cannabis licensing authority. The applicant shall provide the type of license applied for, the name of the licensing authority that denied the application, and the date of denial.
(8) The physical address of the premises. If the Bureau is unable to confirm that the address provided is valid, then the applicant shall provide a document that confirms the physical address of the premises. Such a document may include a utility bill, printed information from the county assessor, deed, or title.
(9) The mailing address for the applicant, if different from the premises address.
(10) The telephone number for the premises.
(11) The website address and email address of the applicant’s business.
(12) The business’ federal employer identification number.
(13) Contact information for the applicant’s designated primary contact person including the name, title, phone number, and email address of the individual.
(14) A description of the business organizational structure of the applicant, such as partnership or corporation.
(15) All business-formation documents, which may include, but are not limited to, articles of incorporation, bylaws, operating agreements, partnership agreements, and fictitious business name statements. The applicant shall also provide all documents filed with the California Secretary of State, which may include, but are not limited to, articles of incorporation, certificates of stock, articles of organization, certificates of limited partnership, and statements of partnership authority. If the commercial cannabis business is held in trust, the applicant shall provide a copy of the certificate of trust establishing trustee authority.
(16) A list of every fictitious business name the applicant is operating under including the address where the business is located.
(17) A commercial cannabis business that is a foreign corporation or foreign limited liability company shall include in its application a certificate of qualification, certificate of registration, or certificate of status issued by the California Secretary of State.
(18) The applicant shall supply the following financial information:
(A) A list of funds belonging to the applicant held in savings, checking, or other accounts maintained by a financial institution. The applicant shall provide, for each account, the financial institution’s name, the financial institution’s address, account type, account number, and the amount of money in the account.
(B) A list of loans made to the applicant. For each loan, the applicant shall provide the amount of the loan, the date of the loan, term(s) of the loan, security provided for the loan, and the name, address, and phone number of the lender.
(C) A list of investments made into the applicant’s commercial cannabis business. For each investment, the applicant shall provide the amount of the investment, the date of the investment, term(s) of the investment, and the name, address, and phone number of the investor.
(D) A list of all gifts of any kind given to the applicant for its use in conducting commercial cannabis activity. For each gift, the applicant shall provide the value of the gift or description of the gift, and the name, address, and phone number of the provider of the gift.
(19) A complete list of every individual who has a financial interest in the commercial cannabis business as defined in section 5004 of this division, who is not an owner as defined in section 5003 of this division.
(20) A complete list of every owner of the applicant as defined in section 5003 of this division. Each individual named on this list shall submit the following information:
(A) The full name of the owner.
(B) The owner’s title within the applicant entity.
(C) The owner’s date of birth and place of birth.
(D) The owner’s social security number or individual taxpayer identification number.
(E) The owner’s mailing address.
(F) The owner’s telephone number. This may include a number for the owner’s home, business, or mobile telephone.
(G) The owner’s email address.
(H) The owner’s current employer.
(I) The percentage of the ownership interest held in the applicant entity by the owner.
(J) Whether the owner has an ownership or a financial interest as defined in sections 5003 and 5004, respectively, of this division in any other commercial cannabis business licensed under the Act.
(K) A copy of the owner’s government-issued identification. Acceptable forms of identification are a document issued by a federal, state, county, or municipal government that includes the name, date of birth, height, gender, and picture of the person, such as a driver license.
(L) A detailed description of the owner’s convictions. A conviction within the meaning of this section means a plea or verdict of guilty or a conviction following a plea of nolo contendere. Convictions dismissed under Penal Code section 1203.4 or equivalent non-California law must be disclosed. Convictions dismissed under Health and Safety Code section 11361.8 or equivalent non-California law must be disclosed. Juvenile adjudications and traffic infractions under $300 that did not involve alcohol, dangerous drugs, or controlled substances do not need to be included. For each conviction, the owner shall provide the following:
(i) The date of conviction.
(ii) Dates of incarceration, if applicable.
(iii) Dates of probation, if applicable.
(iv) Dates of parole, if applicable.
(v) A detailed description of the offense for which the owner was convicted.
(vi) A statement of rehabilitation for each conviction. The statement of rehabilitation is to be written by the owner and may contain evidence that the owner would like the Bureau to consider that demonstrates the owner’s fitness for licensure. Supporting evidence may be attached to the statement of rehabilitation and may include, but is not limited to, a certificate of rehabilitation under Penal Code section 4852.01, and dated letters of reference from employers, instructors, or professional counselors that contain valid contact information for the individual providing the reference.
(M) If applicable, a detailed description of any administrative orders or civil judgments for violations of labor standards, any suspension of a commercial cannabis license, revocation of a commercial cannabis license, or sanctions for unlicensed commercial cannabis activity by a licensing authority, local agency, or state agency against the applicant or a business entity in which the applicant was an owner or officer within the three years immediately preceding the date of the application.
(N) Attestation to the following statement: Under penalty of perjury, I hereby declare that the information contained within and submitted with the application is complete, true, and accurate. I understand that a misrepresentation of fact is cause for rejection of this application, denial of the license, or revocation of a license issued.
(21) Evidence that the applicant has the legal right to occupy and use the proposed location that complies with section 5007 of this division.
(22) Evidence that the proposed premises is in compliance with Business and Professions Code section 26054(b) and section 5026 of this division.
(23) For an applicant with 20 or more employees, the applicant shall attest that the applicant has entered into a labor peace agreement and will abide by the terms of the agreement. The applicant shall submit a copy of the page of the labor peace agreement that contains the signatures of the union representative and the applicant. For applicants who have not yet entered into a labor peace agreement, the applicant shall provide a notarized statement indicating that the applicant will enter into and abide by the terms of a labor peace agreement as soon as reasonably practicable after licensure.
(24) The applicant shall provide a valid seller’s permit number issued by the California Department of Tax and Fee Administration, if applicable. If the applicant has not yet received a seller’s permit, the applicant shall attest that the applicant is currently applying for a seller’s permit.
(25) A diagram of the premises as required by section 5006 of this division.
(26) Proof of a bond as required by section 5008 of this division.
(27) For testing laboratory applications, the certificate(s) of accreditation as required by section 5702 of this division, or the information required for an interim license as required by section 5703 of this division.
(28) When an applicant provides a license, permit, or other authorization from the local jurisdiction where the licensed premises will be or is located, the Bureau will notify the applicable local jurisdiction to confirm the validity of the authorization. If the local jurisdiction does not respond within 10 calendar days, the Bureau shall consider the authorization valid.
(29) All license applications shall include a detailed description of the applicant’s operating procedures. Applicants shall use and submit to the Bureau the following forms, which are incorporated by reference:
(A) Transportation Procedures, Form BCC-LIC-015 (New 10/18)
(B) Inventory Procedures, Form BCC-LIC-016 (New 7/18)
(C) Non-Laboratory Quality Control Procedures, Form BCC-LIC-017 (New 10/18)
(D) Security Procedures, Form BCC-LIC-018 (New 10/18)
(E) Delivery Procedures, Form BCC-LIC-020 (New 10/18)
(30) For applicants applying for a microbusiness license, the application shall include a detailed description of the applicant’s operating procedures required by this section for each cannabis activity the applicant intends to engage in.
(31) For applicants applying for a testing laboratory license, in addition to the operating procedures required under subsection (c)(29) of this section, the standard application shall include the operating procedures required by Chapter 6 of this division.
(32) The limited waiver of sovereign immunity required by section 5009 of this division, if applicable.
(33) Evidence of exemption from, or compliance with, the California Environmental Quality Act as required by sections 5010-5010.3 of this division.
(34) The applicant’s State Employer Identification Number (SEIN) issued by the California Employment Development Department.
(35) For an applicant with more than one employee, the applicant shall attest that the applicant employs, or will employ within one year of receiving a license, one supervisor and one employee who have successfully completed a Cal-OSHA 30-hour general industry outreach course offered by a training provider that is authorized by an OSHA Training Institute Education Center to provide the course.
Authority: Sections 115.4 and 26013, Business and Professions Code.
Reference: Sections 115.4, 144, 26012, 26050, 26051.5 and 26055, Business and Professions Code.
§ 5003 (a) All applicants for a commercial cannabis license shall have at a minimum one individual who meets the definition of “owner” under Business and Professions Code section 26001(al) and who will submit the information required of owners under section 5002 of this division.
§ 5003 (b) “Owner” means any of the following:
(1) A person with an aggregate ownership interest of 20 percent or more in the person applying for a license or a licensee, unless the interest is solely a security, lien, or encumbrance.
(2) The chief executive officer of a nonprofit or other entity.
(3) A member of the board of directors of a nonprofit.
(4) The trustee(s) and all persons who have control of the trust and/or the commercial cannabis business that is held in trust.
(5) An individual entitled to a share of at least 20 percent of the profits of the commercial cannabis business.
(6) An individual who will be participating in the direction, control, or management of the person applying for a license. Such an individual includes any of the following:
(A) A general partner of a commercial cannabis business that is organized as a partnership.
(B) A non-member manager or managing member of a commercial cannabis business that is organized as a limited liability company.
(C) An officer or director of a commercial cannabis business that is organized as a corporation.
§ 5003 (c) When an entity is an owner in a commercial cannabis business, all entities and individuals with a financial interest in the entity shall be disclosed to the Bureau and may be considered owners of the commercial cannabis business. For example, this includes all entities in a multilayer business structure, as well as the chief executive officer, members of the board of directors, partners, trustees and all persons who have control of a trust, and managing members or nonmember managers of the entity. Each entity disclosed as having a financial interest must disclose the identities of persons holding financial interests until only individuals remain.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26001 and, 26012, Business and Professions Code.
§ 5004 (a) A financial interest means an agreement to receive a portion of the profits of a commercial cannabis business, an investment into a commercial cannabis business, a loan provided to a commercial cannabis business, or any other equity interest in a commercial cannabis business except as provided in subsection (d). For the purpose of this division, an agreement to receive a portion of the profits includes, but is not limited to, the following individuals:
(1) An employee who has entered into a profit share plan with the commercial cannabis business.
(2) A landlord who has entered into a lease agreement with the commercial cannabis business for a share of the profits.
(3) A consultant who is providing services to the commercial cannabis business for a share of the profits.
(4) A person acting as an agent, such as an accountant or attorney, for the commercial cannabis business for a share of the profits.
(5) A broker who is engaging in activities for the commercial cannabis business for a share of the profits.
(6) A salesperson who earns a commission.
§ 5004 (b) The license application shall include the name, birthdate, and government-issued identification type and number for all individuals who have a financial interest in a commercial cannabis business but are not owners as defined in section 5003(b) of this division. These individuals shall not be required to submit the information required of owners under section 5002(c)(20) of this division.
§ 5004 (c) When an entity has a financial interest in a commercial cannabis business, then all individuals who are owners of that entity shall be considered financial interest holders of the commercial cannabis business. For example, this includes all entities in a multi-layer business structure, as well as the chief executive officer, members of the board of directors, partners, trustees and all persons who have control of a trust, and managing members or non-member managers of the entity. Each entity disclosed as having a financial interest must disclose the identities of persons holding financial interests until only individuals remain.
§ 5004 (d) Notwithstanding subsection (b), the following persons are not required to be listed on an application for licensure under section 5002(c)(19) of this division:
(1) A bank or financial institution whose interest constitutes a loan;
(2) Persons whose only financial interest in the commercial cannabis business is through an interest in a diversified mutual fund, blind trust, or similar instrument;
(3) Persons whose only financial interest is a security interest, lien, or encumbrance on property that will be used by the commercial cannabis business; and
(4) Persons who hold a share of stock that is less than 5 percent of the total shares in a publicly traded company.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012 and 26051.5, Business and Professions Code.
§ 5005 (a) A license authorized by the Act and issued by the Bureau may not be held by, or issued to, any person holding office in, or employed by, any agency of the State of California or any of its political subdivisions when the duties of such person have to do with the enforcement of the Act or any other penal provisions of law of this State prohibiting or regulating the sale, use, possession, transportation, distribution, testing, manufacturing, or cultivation of cannabis goods.
§ 5005 (b) This section applies to, but is not limited to, any person employed in the State of California Department of Justice as a peace officer, in any district attorney’s office, in any city attorney’s office, in any sheriff’s office, or in any local police department.
§ 5005 (c) No person listed in subsection (a) or (b) of this section may have any ownership interest, directly or indirectly, in any business to be operated or conducted under a cannabis license.
§ 5005 (d) This section does not apply to any person who holds a license in the capacity of executor, administrator, or guardian.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26012, Business and Professions Code.
§ 5006 (a) An applicant shall submit to the Bureau, with the application, a complete and detailed diagram of the proposed premises. The diagram shall be used by the Bureau to determine whether the premises meets the requirements under this division and the Act. The Bureau shall deny an application if the premises does not qualify for licensure pursuant to Business and Professions Code section 26057.
§ 5006 (b) The diagram shall show the boundaries of the property and the proposed premises to be licensed, showing all boundaries, dimensions, entrances and exits, interior partitions, walls, rooms, windows, and doorways, and shall include a brief statement or description of the principal activity to be conducted therein.
§ 5006 (c) The diagram shall show and identify commercial cannabis activities that will take place in each area of the premises, and identify limited-access areas. Commercial cannabis activities that shall be identified on the diagram include the following, if applicable to the business operations: storage, batch sampling, loading or unloading of shipments, packaging and labeling, customer sales, loading for deliveries, extraction, infusion, cultivation, and processing.
§ 5006 (d) The diagram shall show where all cameras are located and assign a number to each camera for identification purposes unless the premises is exempt from the video surveillance requirement pursuant to section 5315 of this division.
§ 5006 (e) The diagram shall be to scale.
§ 5006 (f) The diagram shall not contain any highlighting and the markings on the diagram shall be in black-and-white print.
§ 5006 (g) If the proposed premises consists of only a portion of a property, the diagram must be labeled indicating which part of the property is the proposed premises and what the remaining property is used for.
§ 5006 (h) If the proposed premises consists of only a portion of a property that will contain two or more licensed premises, the diagram shall clearly show the designated entrances and walls under the exclusive control of the applicant for the premises, as well as the designated entrances and walls for each additional premises. The diagram shall also show all proposed common or shared areas of the property. Such areas may include lobbies, bathrooms, hallways, and breakrooms.
§ 5006 (i) If the proposed premises will be a microbusiness that includes cultivation activities, in addition to the requirements of this section, the premises diagram shall also include all the required information for a premises diagram under section 5501(d) of this division.
§ 5006 (j) If a proposed premises is located on only a portion of a property that also includes a residence, the diagram shall clearly show the designated buildings for the premises and the residence.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012 and 26051.5, Business and Professions Code.
§ 5007 (b) If the applicant is the landowner of the real property upon which the premises is located, the applicant shall provide to the Bureau a copy of the title or deed to the property.
§ 5007 (c) If the landowner is a trust, the landowner approval shall come from the person who holds equitable title in the real property.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26051.5, Business and Professions Code.
The Bureau will accept an electronic signature that complies with Civil Code section 1633.2(h) on any documents required to be submitted to the Bureau and that are submitted electronically, except documents that are required to be notarized.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26013, Business and Professions Code.
Applicants and licensees shall use their legal business name on all documents related to commercial cannabis activity.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26013, Business and Professions Code.
An applicant shall provide proof of having obtained a surety bond of at least $5,000 payable to the State of California to ensure payment of the cost incurred for the destruction of cannabis goods necessitated by a violation of the Act or the regulations adopted thereunder. All bonds required under this regulation must be issued by a corporate surety licensed to transact surety business in the State of California and shall be issued on the Commercial Cannabis Licensee Bond form under Title 11, California Code of Regulations, Article 56, section 118.1. A bond shall be required for each license.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26051.5, Business and Professions Code.
§ 5009 (a) Any applicant or licensee that may fall within the scope of sovereign immunity that may be asserted by a federally recognized tribe or other sovereign entity must waive any sovereign immunity defense that the applicant or licensee may have, may be asserted on its behalf, or may otherwise be asserted in any state administrative or judicial enforcement actions against the applicant or licensee, regardless of the form of relief sought, whether monetary or otherwise, under the state laws and regulations governing commercial cannabis activity. The applicant or licensee must submit a written waiver of sovereign immunity to the Bureau with any license application or renewal, which is valid for the period of the license. The written waiver shall include that the applicant or licensee has the lawful authority to enter into the waiver required by this section, the applicant or licensee hereby waives sovereign immunity, and the applicant or licensee agrees to do all of the following:
(1) Provide documentation to the Bureau that establishes that the applicant or licensee has the lawful authority to enter into the waiver required by this section;
(2) Conduct all commercial cannabis activity in full compliance with the state laws and regulations governing commercial cannabis activity, including submission to all enforcement provisions thereof;
(3) Allow access as required by state statute or regulation by persons or entities charged with duties under the state laws and regulations governing commercial cannabis activity to any licensed premises or property at which the applicant conducts any commercial cannabis activity, including licensed premises or property where records of commercial cannabis activity are maintained by or for the applicant or licensee;
(4) Provide any and all records, reports, and other documents as may be required under the state laws and regulations governing commercial cannabis activity;
(5) Conduct commercial cannabis activity with other state commercial cannabis licensees only, unless otherwise specified by state law;
(6) Meet all of the requirements for licensure under the state laws and regulations governing the conduct of commercial cannabis activity, and provide truthful and accurate documentation and other information of the applicant’s qualifications and suitability for licensure as may be requested; and
(7) Submit to the personal and subject matter jurisdiction of the California courts to address any matter related to the waiver or the commercial cannabis application, license, or activity, and that all such matters and proceedings shall be governed, construed and enforced in accordance with California substantive and procedural law, including but not limited to the Medicinal and Adult- Use Regulation and Safety Act and the Administrative Procedure Act.
§ 5009 (b) The Bureau shall not approve an application for a state license if approval of the license would violate the provisions of any local ordinance or regulation adopted in accordance with Business and Professions Code section 26200 that is issued by the county or, if within a city, the city, within which the licensed premises is to be located.
§ 5009 (c) Any applicant or licensee must immediately notify the Bureau of any changes that may materially affect the applicant or licensee’s compliance with subsection (a) of this section.
§ 5009 (d) Any failure by an applicant or licensee to comply with the requirements of subsections (b) or (c) of this section shall be a basis for denial of an application or renewal or discipline of a licensee.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012, 26050 and 26051.5, Business and Professions Code.
§ 5010 (a) For purposes of complying with the California Environmental Quality Act (CEQA):
(1) “Project” means the commercial cannabis activity or activities for which an annual license application is submitted to the Bureau and which requires the Bureau to engage in discretionary review.
(2) “CEQA Guidelines” means the Guidelines for Implementation of the California Environmental Quality Act codified at Title 14, California Code of Regulations, section 15000 et seq.
(3) “Environmental document” has the same meaning as section 15361 of the CEQA Guidelines. Environmental documents are prepared by the applicant or the local jurisdiction that analyze the commercial cannabis activity or activities and which assess whether the project has the potential to generate significant adverse environmental impacts.
§ 5010 (b) An applicant may provide evidence of compliance with CEQA by submitting a copy of an environmental document previously certified or adopted by the local jurisdiction that evaluated the project.
§ 5010 (c) If a previously certified or adopted environmental document is not available or does not exist, and if the Bureau does not determine that the project is exempt from CEQA as provided in section 5010.2 of this division, the applicant shall provide information to enable the Bureau to determine what type of environmental document should be prepared by submitting the CEQA Project-Specific Information Form, BCC-LIC-025 (New 10/18), incorporated herein by reference. Such information shall include at least the following:
(1) The project location and surrounding land use, which shall:
(A) Describe the project location, including street address, city, county, Assessor’s Parcel Number, major cross streets, general plan designation, zoning designation, and any other physical description that clearly indicates the project site location.
(B) Describe the surrounding land uses and zoning designations within a one-half mile radius of the project and list all abutting land uses.
(C) Include a vicinity map and aerial image to show the project location.
(D) Include photographs, not larger than 8 ½ by 11 inches, of existing visual conditions as observed from publicly accessible vantage point(s).
(2) A project description, which shall:
(A) Describe the activities included in the project application and identify any other commercial cannabis activity or activities occurring at the proposed premises.
(B) Quantify the project size (total floor area of the project), and the lot size on which the project is located, in square feet.
(C) List and describe any other related public agency permits and approvals, including any entitlements, required for this project, including those required by a planning commission, local air district, or regional water board.
(D) Identify whether the applicant is licensed by, or has applied for licensure from, the California Department of Food and Agriculture or the State Department of Public Health to engage in commercial cannabis activity at the proposed premises.
(E) Estimate the number of anticipated employees onsite, occupancy during operating hours, and frequency of deliveries or shipments originating from and/or arriving to the project site, and describe the anticipated transportation activity at the project site including the effects of the project related to public transit, bicycle, or pedestrian facilities.
(F) Identify the location, type, and quantity of hazardous materials, as defined by Health and Safety Code section 25260, that are stored, used, or disposed of at the project site and a copy of the Hazardous Material Business Plan (HMBP) prepared for the proposed premises, if any.
(G) Discuss whether the project will increase the quantity and type of solid waste, as defined by Public Resources Code section 40191, or hazardous waste, as defined by Health and Safety Code section 25117, that is generated or stored onsite.
(H) Describe the project’s anticipated operational energy needs, identify the source of energy supplied for the project and the anticipated amount of energy per day, and explain whether the project will require an increase in energy demand and the need for additional energy resources.
(3) The Bureau shall consider, for purposes of evaluating compliance with CEQA, both the individual and cumulative impacts of all commercial cannabis activities occurring at the proposed premises.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26055, Business and Professions Code.
§ 5010.1 (a) When the project has been evaluated in a previously certified or adopted environmental document, the Bureau will evaluate the project as a responsible agency as provided in section 15096 of the CEQA Guidelines.
§ 5010.1 (b) The Bureau may require subsequent environmental review if one or more of the events outlined in Public Resources Code section 21166 or section 15162 of the CEQA Guidelines occurs.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26055, Business and Professions Code; and Section 21166, Public Resources Code.
§ 5010.2 (a) An applicant may submit documentation to the Bureau demonstrating that the project is exempt from further environmental review pursuant to CEQA, because the project falls within a class of projects determined not to have significant effect on the environment, by submitting the CEQA Exemption Petition, BCC-LIC-026 (New 10/18), incorporated herein by reference.
§ 5010.2 (b) Documentation submitted to the Bureau in support of a determination that the project is exempt from further environmental review under CEQA shall, at minimum, include the following information:
(1) Project location and surrounding land use, as required in section 5010 of this division;
(2) Project description, as required in section 5010 of this division; and
(3) A written justification to support a determination that the project is categorically exempt. The written justification shall list the category and class the exemption falls under and shall explain how the project fits the specified exemption. The justification shall also demonstrate that none of the exceptions to categorical exemptions described in section 15300.2 of the CEQA Guidelines apply to the project.
§ 5010.2 (c) Upon review, if the Bureau determines that the project is exempt from further CEQA review, and approves an application for annual licensure, the Bureau will file a Notice of Exemption with the State Clearinghouse within 5 business days after approval of the project as required by section 15062(c) of the CEQA Guidelines.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26055, Business and Professions Code.
If the Bureau determines that a project does not qualify for an exemption, or that the circumstances described in Public Resources Code section 21166 and section 15162 of the CEQA Guidelines require subsequent environmental review, the Bureau may charge the applicant for the costs of preparation for any supplemental environmental document as well as the Bureau’s costs for procedures to comply with CEQA, unless the Bureau specifies otherwise.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26055, Business and Professions Code.
The Bureau may request additional information and documents from the applicant. The Bureau will provide the applicant a deadline for submittal of additional information. The Bureau will consider the complexity of the information requested and the ease with which the information can be obtained and transmitted to the Bureau by the applicant in determining the deadline.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26031, 26050 and 26051.5, Business and Professions Code.
§ 5012 (a) If the Bureau determines that the application is incomplete, the Bureau may provide notice to the applicant in accordance with Business and Professions Code section 124.
§ 5012 (b) If the Bureau issues a notice pursuant to Business and Professions Code section 124, an applicant has one year from the date of the notice in subsection (a) of this section to correct all deficiencies. If the applicant fails to correct the deficiencies within the one-year period and has not responded to the Bureau’s attempts to contact the applicant, the application shall be considered abandoned under Business and Professions Code section 142.
§ 5012 (c) An applicant may reapply at any time following an abandoned application.
§ 5012 (d) The Bureau will not refund application fees for an incomplete or abandoned application.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 124, 142, 26050 and 26051.5, Business and Professions Code.
§ 5013 (a) An applicant may withdraw an application at any time prior to the Bureau’s issuance of a license or denial of a license.
§ 5013 (b) Requests to withdraw an application must be submitted to the Bureau in writing, dated, and signed by the applicant.
§ 5013 (c) In accordance with Business and Professions Code section 118, withdrawal of an application shall not, unless the Bureau has consented in writing to such withdrawal, deprive the Bureau of its authority to institute or continue a proceeding against the applicant for the denial of the license upon any ground provided by law or to enter an order denying the license upon any such ground.
§ 5013 (d) The Bureau will not refund application fees for a withdrawn application.
§ 5013 (e) An applicant may reapply at any time following the withdrawal of an application and will be required to submit a new application and fee.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 118 and 26050, Business and Professions Code.
§ 5014 (a) The application fee for an annual license under section 5002 of this division, a cannabis event organizer license under section 5600 of this division, a temporary cannabis event license under section 5601 of this division for each event, and physical modification of the premises under section 5027 of this division shall be paid by an applicant or licensee as provided by this division. Applicants and licensees shall pay the appropriate fee as outlined in this section.
§ 5014 (b) The annual licensing fee for each license shall be paid by an applicant or licensee after the Bureau has approved the application. The Bureau shall not issue the license until the annual licensing fee has been paid.
§ 5014 (c) To determine the appropriate license fee due, the applicant or licensee shall first estimate the gross revenue for the 12-month license period of the license. Based on the license type sought, the applicant or licensee shall identify the appropriate tier category in which their expected gross revenue belongs, as identified in the Annual License Fee Schedule chart found in this section. The license fee associated with the licensing tier category the applicant or licensee has identified using their expected gross revenue shall be the license fee due for the application or renewal.
§ 5014 (d) Notwithstanding the fees identified above, cannabis event organizers shall pay the appropriate fee as outlined in this section.
§ 5014 (e) All fees are nonrefundable.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012, 26051.5 and 26180, Business and Professions Code.
§ 5015 (a) Any fee specified in this division shall be made to the Bureau of Cannabis Control by cash, check, money order, debit card, or credit card. Check and money order payments may be made out to the Bureau of Cannabis Control or the Department of Consumer Affairs.
§ 5015 (b) If the fee is paid by debit or credit card:
(1) The payment shall be made through the Bureau’s online licensing system; and
(2) The applicant or licensee may be required to pay any associated processing or convenience fees to the third-party vendor processing the payment on behalf of the Bureau.
§ 5015 (c) Failure to pay the appropriate licensing fee is grounds for discipline. If the Bureau determines that the licensee paid an amount less than the appropriate licensing fee under section 5014 of this division, the licensee will be required to pay the balance of the appropriate fee and a penalty fee of 50 percent of the appropriate licensing fee. The Bureau in its discretion may waive the penalty fee.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012, 26051.5 and 26180, Business and Professions Code.
§ 5016 (a) Priority licensing is available for annual licenses only, and is not applicable to any temporary or cannabis event organizer license.
§ 5016 (b) To be eligible for priority licensing, an applicant must be able to demonstrate that the applicant operated in compliance with the Compassionate Use Act of 1996 and its implementing laws before September 1, 2016. Eligibility for priority licensing shall be established by one of the following methods:
(1) The applicant is included on the list provided to the Bureau by the local jurisdiction in response to the Bureau’s request required by Business and Professions Code section 26054.2.
(2) If the local jurisdiction does not provide a list to the Bureau or the applicant’s name does not appear on the list provided to the Bureau, the applicant shall provide to the Bureau evidence of operation in compliance with the Compassionate Use Act of 1996. Such evidence shall be in the form of a document issued or signed by the applicant’s local jurisdiction that contains the following:
(A) Name of the applicant;
(B) Address of the premises to be licensed;
(C) License type(s) that the applicant is applying to the Bureau for;
(D) Name of the local jurisdiction;
(E) Name of the local jurisdiction office that is responsible for enforcing compliance with the Compassionate Use Act of 1996;
(F) Name and contact information for the person authorized by the local jurisdiction to sign on its behalf;
(G) Signature of the person authorized to sign on behalf of the local jurisdiction; and
(H) A statement to the effect of: “The above–named party is currently conducting commercial cannabis activity in this jurisdiction and has been operating in compliance with the Compassionate Use Act of 1996 since before September 1, 2016.”
§ 5016 (c) The Bureau shall not provide priority licensing pursuant to this section after December 31, 2019.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012 and 26054.2, Business and Professions Code.
§ 5017 (a) For the purpose of license denial, convictions that are substantially related to the qualifications, functions, or duties of the business for which the application is made include:
(1) A violent felony conviction, as specified in Penal Code section 667.5(c).
(2) A serious felony conviction, as specified in Penal Code section 1192.7(c).
(3) A felony conviction involving fraud, deceit, or embezzlement.
(4) A felony conviction for hiring, employing, or using a minor in transporting, carrying, selling, giving away, preparing for sale, or peddling, any controlled substance to a minor; or selling, offering to sell, furnishing, offering to furnish, administering, or giving any controlled substance to a minor.
(5) A felony conviction for drug trafficking with enhancements pursuant to Health and Safety Code section 11370.4 or 11379.8.
§ 5017 (b) Except as provided in subsections (a)(4) and (a)(5) of this section and notwithstanding Chapter 2 (commencing with Section 480) of Division 1.5 of the Business and Professions Code, a prior conviction, where the sentence, including any term of probation, incarceration, or supervised release, is completed, for possession of, possession for sale, sale, manufacture, transportation, or cultivation of a controlled substance is not considered substantially related, and shall not be the sole ground for denial of a license. Conviction for any controlled substance felony subsequent to licensure shall be grounds for revocation of a license or denial of the renewal of a license.
§ 5017 (c) When evaluating whether an applicant who has been convicted of a criminal offense that is substantially related to the qualifications, functions, or duties of the business for which the application is made should be issued a license, the Bureau shall consider the following criteria of rehabilitation:
(1) The nature and severity of the act or offense;
(2) Whether the person has a felony conviction based on possession or use of cannabis or cannabis products that would not be a felony if the person was convicted of the offense on the date of the person’s application;
(3) The applicant’s criminal record as a whole;
(4) Evidence of any act committed subsequent to the act or offense under consideration that could be considered grounds for denial, suspension, or revocation of a commercial cannabis activity license;
(5) The time that has elapsed since commission of the act or offense;
(6) The extent to which the applicant has complied with any terms of parole, probation, restitution, or any other sanctions lawfully imposed against the applicant;
(7) If applicable, evidence of dismissal under Penal Code sections 1203.4, 1203.4a, 1203.41 or another state’s similar law;
(8) If applicable, a certificate of rehabilitation obtained under Penal Code section 4852.01 or another state’s similar law; and
(9) Other evidence of rehabilitation submitted by the applicant.
§ 5017 (d) If an applicant has been denied a license based on a conviction, the applicant may request a hearing pursuant to Business and Professions Code section 26058 to determine if the applicant should be issued a license.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 482, 26012 and 26057, Business and Professions Code.
In addition to the reasons for denial in Business and Professions Code section 26057, a license may be denied for the following reasons:
§ 5018 (a) The applicant’s proposed premises does not fully comply with standards set in regulation.
§ 5018 (b) The applicant’s proposed or licensed premises is substantially different from the diagram of the proposed premises submitted by the applicant, in that the size, layout, location of common entryways, doorways, or passage ways means of public entry or exit, or identification of limited access areas within the licensed premises is not the same.
§ 5018 (c) The applicant denied the Bureau access to the licensed premises.
§ 5018 (d) The applicant made a material misrepresentation on the application.
§ 5018 (e) The applicant did not correct the deficiencies within the application in accordance with sections 5002 and 5012 of this division.
§ 5018 (f) The applicant has been denied a license, permit, or other authorization to engage in commercial cannabis activity by a state or local licensing authority.
§ 5018 (g) The applicant’s proposed premises is not in compliance with Division 13 (commencing with Section 21000) of the Public Resources Code.
§ 5018 (h) The applicant has failed to remit taxes as required under the Revenue and Taxation Code.
§ 5018 (i) The applicant may be denied a license for any violations of law related to the operations of the commercial cannabis business or for any violations of law related to licensure.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 480, 490, 26012, 26030 and 26050, Business and Professions Code.
§ 5019 (a) In determining whether to grant, deny, or renew a license for a retail premises or microbusiness premises authorized to engage in retail sales, the Bureau shall consider if an excessive concentration exists in the area where the licensee will operate. For the purposes of this section “excessive concentration” applies when either of the following conditions exist:
(1) The ratio of licensees to population within the census tract or census division in which the applicant premises is located exceeds the ratio of licensees to population in the county in which the applicant premises is located, unless denial of the application would unduly limit the development of the legal market so as to perpetuate the illegal market for cannabis goods.
(2) The ratio of retail licenses or microbusiness licenses to the population within the census tract, census division, or jurisdiction exceeds that allowable by local ordinance adopted under Business and Professions Code section 26200.
§ 5019 (b) “Population Within the Census Tract or Census Division” as used in this section means the population as determined by the most recent United States decennial or special census. Such population determination shall not operate to prevent an applicant from establishing that an increase of resident population has occurred within the census tract or census division.
§ 5019 (c) “Population in the County” as used in this section shall be determined by the most recent annual population estimate for California counties published by the Demographic Research Unit, State Department of Finance.
§ 5019 (d) Beginning July 1, 2018, the Bureau shall calculate the ratios described in subsection (a) of this section once every six months using the most current available data. The Bureau’s consideration of whether to grant, deny, or renew a license shall be based upon the most recent ratio calculated by the Bureau on the date of the Bureau’s decision.
§ 5019 (e) The existence of an excessive concentration shall not be considered in determining whether to grant, deny, or extend a temporary license under Business and Professions Code section 26050.1.
§ 5019 (f) The applicant may provide reliable evidence establishing, to the satisfaction of the Bureau, that a denial of a license would unduly limit the development of the legal market so as to perpetuate the illegal market for cannabis goods.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012 and 26051, Business and Professions Code.
§ 5020 (a) To timely renew a license, a completed license renewal form and annual license fee pursuant to section 5014 of this division shall be received by the Bureau from the licensee no earlier than 60 calendar days before the expiration of the license and no later than 5:00 p.m. Pacific Time on the last business day before the expiration of the license if the renewal form is submitted to the Bureau at its office(s), or no later than 11:59 p.m. on the last business day before the expiration of the license if the renewal form is submitted to the Bureau through its electronic licensing system. Failure to receive a notice for license renewal does not relieve a licensee of the obligation to renew all licenses as required.
§ 5020 (b) In the event the license is not submitted for renewal prior to the expiration date, the licensee must not sell, transfer, transport, manufacture, test, or distribute any commercial cannabis goods until the license is renewed.
§ 5020 (c) A licensee may submit a license renewal form up to 30 calendar days after the license expires. Any late renewal form will be subject to a late fee equal to 50 percent of the applicable licensing fee required by subsection (a) of this section.
§ 5020 (d) The license renewal form shall contain the following:
(1) The name of the licensee. For licensees who are individuals, the applicant shall provide both the first and last name of the individual. For licensees who are business entities, the licensee shall provide the legal business name of the applicant.
(2) The license number and expiration date.
(3) The licensee’s address of record and licensed premises address.
(4) Documentation demonstrating the licensee’s gross revenue for the current licensed period, such as a copy of the licensee’s state tax return filed with the California Department of Tax and Fee Administration.
(5) Documentation of any change to any item listed in the original application under section 5002 of this division that has not been reported to the Bureau through another process pursuant to the Act or this division.
(6) An attestation that all information provided to the Bureau in the license renewal form and the original application under section 5002 of this division or subsequent notification under sections 5023 and 5024 of this division is accurate and current.
(7) A limited waiver of sovereign immunity pursuant to section 5009 of this division.
(8) For a licensee with more than one employee, the licensee shall attest that it employs, or will employ within one year of renewing the license, one supervisor and one employee who has successfully completed a Cal-OSHA 30-hour general industry outreach course offered by a training provider that is authorized by an OSHA Training Institute Education Center to provide the course.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012 and 26050, Business and Professions Code.
§ 5021 (a) The Bureau may deny an application for a new license or a renewal of a license for any reason specified in Business and Professions Code section 26057, and on any additional grounds including grounds for denial under section 5018 of this division, and grounds for discipline under the Act or this division.
§ 5021 (b) Upon denial of an application for a license or renewal of a license, the Bureau shall notify the applicant in writing of the reasons for denial, and the right to a hearing to contest the denial.
§ 5021 (c) The applicant may request a hearing to contest the denial by submitting a written request to the Bureau.
(1) The written request for a hearing must be postmarked within 30 calendar days of service of the notification of denial.
(2) If the written request for a hearing is not received within the required timeframe, the applicant’s right to a hearing is waived.
(3) Upon timely receipt of the written request for hearing, the Bureau shall set a date for hearing to be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012, 26057 and 26058, Business and Professions Code.
§ 5022 (a) Every licensee who abandons, quits, or closes the licensed premises for a period exceeding 30 consecutive calendar days shall request in writing that the Bureau cancel the license, within 14 calendar days after closing, quitting, or abandoning the licensed premises, by submitting the Notification and Request Form, BCC-LIC-027 (New 10/18), incorporated herein by reference. The Bureau may revoke the license of a licensee who fails to comply with the provisions of this section. Upon cancellation or revocation of the license, the licensee shall not display and shall destroy the license certificate.
§ 5022 (b) The Bureau may cancel a license at any time upon request by the licensee if there are no outstanding fines or fees due to the Bureau and no disciplinary action is pending.
§ 5022 (c) If a licensee must close the licensed premises for a period exceeding 30 consecutive calendar days to make renovations or repairs, the Bureau may allow the licensee to retain the license if the licensee complies with section 5027 of this division.
§ 5022 (d) A person whose license has been cancelled or revoked pursuant to subsection (a) of this section may submit to the Bureau a written request for the license to be reinstated. Any request shall be submitted to the Bureau prior to the expiration date listed on the cancelled or revoked license. The written request shall specify the reason the licensee failed to comply with subsection (a) of this section and why the license should be reinstated. The Bureau in its discretion may reinstate the license.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012 and 26050, Business and Professions Code.
Business modifications to items contained in the application shall be made in accordance with the following:
§ 5023 (a) Changes to standard operating procedures may be made without providing notification to the Bureau, except at renewal as required under section 5020 of this division. Licensees shall maintain a copy of all current and prior operating procedures as required by section 5037 of this division.
§ 5023 (b) If at the time of licensure, a licensee employed less than 20 employees and later employs 20 or more employees, the licensee shall provide to the Bureau a document attesting that the licensee has entered into a labor peace agreement and will abide by the terms of the agreement, as soon as reasonably practicable once employing 20 or more employees. Once the licensee has entered into the labor peace agreement, the licensee shall provide the Bureau with a copy of the page of the labor peace agreement that contains the signatures of the union representative and the applicant.
§ 5023 (c) Licenses are not transferrable or assignable to another person or owner. In the event of the sale or other transfer of the business or operations covered by the licensee, changes in ownership shall be made in accordance with the following:
(1) If one or more of the owners of a license change, the new owners shall submit the information required under section 5002(c)(20) for each new owner to the Bureau within 14 calendar days of the effective date of the ownership change. The business may continue to operate under the active license while the Bureau reviews the qualifications of the new owner(s) in accordance with the Act and these regulations to determine whether the change would constitute grounds for denial of the license, if at least one existing owner is not transferring his or her ownership interest and will remain as an owner under the new ownership structure. If all owners will be transferring their ownership interest, the business shall not operate under the new ownership structure until a new license application has been submitted to and approved by the Bureau, and all application and license fees for the new application have been paid.
(A) A change in ownership occurs when a new person meets the definition of owner in section 5003 of this division.
(B) A change in ownership does not occur when one or more owners leave the business by transferring their ownership interest to the other existing owner(s).
(2) In cases where one or more owners leave the business by transferring their ownership interest to the other existing owner(s), the owner or owners that are transferring their interest shall provide a signed statement to the Bureau confirming that they have transferred their interest.
§ 5023 (d) When there is a change in persons with financial interest(s) in the commercial cannabis business that do not meet the requirements for a new license application under this section, the licensee shall submit the information required by sections 5002(c)(19) and 5004 of this division to the Bureau within 14 calendar days of the change.
§ 5023 (e) When any of the following changes occur, the licensee shall notify the Bureau within 14 calendar days of the change:
(1) Any change to contact information from the information provided to the Bureau in the original application.
(2) Any change in name if the licensee is an individual, or any change in legal business name if the licensee is a business entity.
(3) Any change in business trade name (DBA) or fictitious business names.
(4) Any change to financial information including funds, loans, investments, and gifts required in the original application under section 5002(c)(18) of this division.
(5) Any change in the bond required under section 5008 of this division.
(6) Any change or lapse in insurance coverage required under section 5308 of this division.
§ 5023 (f) Licensees may request to add an A-designation or M-designation to their license by sending a notification to the Bureau signed by at least one owner as defined in section 5003 of this division. A licensee shall not operate under the requested designation until they have received approval from the Bureau.
§ 5023 (g) Microbusiness licensees may add a commercial cannabis activity to their license or remove a commercial cannabis activity from their license if doing so is consistent with the requirement set forth in section 5500(a) of this division that licensees engage in at least three (3) commercial cannabis activities. Licensees shall request the modification by completing a request to modify the licensed premises pursuant to section 5027 of this division. A licensee shall not engage in a new commercial cannabis activity until they have paid for the modification and received approval from the Bureau.
§ 5023 (h) Licenses may not be transferred from one premises to another. Licensees shall not operate out of a new premises until they have been issued a new license.
§ 5023 (i) For any business modification or notification under this section, licensees shall use and submit to the Bureau the Notification and Request Form, BCC-LIC-027 (New 10/18), which is incorporated herein by reference, unless the change can be made through the Bureau’s online system.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 136 and 26012, Business and Professions Code.
§ 5024 (a) In the event of the death, incapacity, receivership, assignment for the benefit of creditors or other event rendering one or more owners incapable of performing the duties associated with the license, the owner or owners’ successor in interest (e.g., appointed guardian, executor, administrator, receiver, trustee, or assignee) shall notify the Bureau in writing, within 14 calendar days, by submitting the Notification and Request Form, BCC-LIC-027 (New 10/18), which is incorporated herein by reference.
§ 5024 (b) To continue operations or cancel the existing license, the successor in interest shall submit to the Bureau the following:
(1) The name of the successor in interest;
(2) Any change in name if the licensee is an individual, or any change in legal business name if the licensee is a business entity;
(3) The phone number, mailing address, and email address of the successor in interest; and
(4) Documentation demonstrating that the owner(s) is incapable of performing the duties associated with the license such as a death certificate or a court order, and documentation demonstrating that the person making the request is the owner or owners’ successor in interest such as a court order appointing guardianship, receivership, or a will or trust agreement.
§ 5024 (c) The Bureau may give the successor in interest written approval to continue operations on the licensed business premises for a period of time specified by the Bureau:
(1) If the successor in interest or another person has applied for a license from the Bureau for the licensed premises and that application is under review;
(2) If the successor in interest needs additional time to destroy or sell cannabis goods; or
(3) At the discretion of the Bureau.
§ 5024 (d) The successor in interest is held subject to all terms and conditions under which a state cannabis license is held pursuant to the Act.
§ 5024 (e) The approval creates no vested right to the issuance of a state cannabis license.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26012, Business and Professions Code.
In the event a license is terminated for any reason while cannabis goods remain on the premises, the following actions may be taken:
§ 5024.1 (a) The cannabis goods may be destroyed by the former licensee; or
§ 5024.1 (b) A licensed distributor or licensed microbusiness authorized to engage in distribution may be authorized by the Bureau to purchase and distribute the former licensee’s entire inventory stock in accordance with the following;
(1) A licensed distributor or licensed microbusiness authorized to engage in distribution shall, within 14 calendar days of the termination of the former licensee’s license, submit a written request to the Bureau, on the Notification and Request Form, BCC-LIC-027 (New 10/18), which is incorporated by reference, for authorization to purchase the cannabis goods from the former licensee; and
(2) Upon approval from the Bureau, the licensed distributor or licensed microbusiness authorized to engage in distribution shall transport the cannabis goods to their premises, arrange for laboratory testing, and perform quality assurance in accordance with Chapter 2 of this division. If the cannabis goods have already been tested in accordance with Chapter 6 of this division and have a valid certificate of analysis for regulatory compliance testing that is less than 12 months old, the cannabis goods are not required to undergo additional testing.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26011.5 and 26013, Business and Professions Code.
§ 5025 (a) Each license shall have a designated licensed premises, with a distinct street address and suite number if applicable, for the licensee’s commercial cannabis activity. Each licensed premises shall be subject to inspection by the Bureau.
§ 5025 (b) The Bureau may allow a licensee to conduct both adult-use and medicinal commercial cannabis activity on the same licensed premises if all of the following criteria are met:
(1) The licensee holds both an A-designation and an M-designation on the license for the identical type of commercial cannabis activity; and
(2) The licensee only conducts one type of commercial cannabis activity on the licensed premises.
§ 5025 (c) Licensed retailers and licensed microbusinesses authorized to engage in retail sales shall only serve customers who are within the licensed premises, or at a delivery address that meets the requirements of this division.
(1) The sale and delivery of cannabis goods shall not occur through a pass-out window or a slide- out tray to the exterior of the licensed premises.
(2) Licensed retailers or licensed microbusinesses authorized to engage in retail sales shall not operate as or with a drive-in or drive-through at which cannabis goods are sold to persons within or about a motor vehicle.
(3) No cannabis goods shall be sold and/or delivered by any means or method to any
person within a motor vehicle.
§ 5025 (d) Alcoholic beverages as defined in Business and Professions Code section 23004 shall not be stored or consumed on a licensed premises.
§ 5025 (e) Any licensed premises that is adjacent to another premises engaging in manufacturing or cultivation shall be separated from those premises by walls, and any doors leading to the cultivation or manufacturing premises shall remain closed.
§ 5025 (f) Cannabis shall not be dispersed in the air throughout the premises or throughout a portion of the premises by an oil diffuser or any other vaporizing device that is intended to disperse the vapor throughout the premises or throughout a portion of the premises. This section shall not be interpreted to prohibit cannabis consumption on the premises of a licensed retailer or licensed microbusiness authorized to engage in retail sales that is conducted in accordance with Business and Professions Code section 26200(g).
§ 5025 (g) Notwithstanding subsection (c) of this section, an applicant or licensee may have a drive-in or drive-through window only if, prior to June 1, 2018:
(1) The licensee or applicant received a license or permit from the local jurisdiction for a premises including a drive-in or drive-through window which was disclosed on the local application; or
(2) The licensee or applicant has submitted an application to the local jurisdiction for a license or permit which, at the time of submission of the application, included information that a drive-in or drive-through window was already part of, or proposed to be part of, the premises, and after June 1, 2018, the local jurisdiction approves the premises with a drive-in or drive-through window.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26001, 26012 and 26053, Business and Professions Code.
§ 5026 (a) A premises licensed under this division shall not be located within a 600-foot radius of a school providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center that is in existence at the time the license is issued.
§ 5026 (b) Notwithstanding subsection (a) of this section, if a local jurisdiction has issued a license or permit to conduct commercial cannabis activity at a premises that is located within a 600-foot radius of a school providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center, the Bureau may approve the premises for licensure if the following conditions are met:
(1) The applicant submits a copy of a valid license or permit from the local jurisdiction with the application for licensure; and
(2) The local jurisdiction notifies the Bureau that the applicant is in compliance with all applicable local ordinances and regulations pursuant to Business and Professions Code section 26055(g)(2)(C).
§ 5026 (c) A licensed premises shall not be in a location that requires persons to pass through a business that sells alcohol or tobacco or a private residence to access the licensed premises.
§ 5026 (d) A licensed premises shall not be in a location that requires persons to pass through the licensed premises to access a business that sells alcohol or tobacco or a private residence.
§ 5026 (e) A licensed premises shall not be located within a private residence.
§ 5026 (f) Licensees shall ensure that the Bureau has immediate access to their licensed premises. If the Bureau is denied access to a licensee’s premises for any reason, the licensee shall be held responsible and subject to discipline. If the Bureau is denied access to one licensee’s premises because of another licensee’s refusal to grant access when the only access to one licensed premises is through another licensed premises, all licensees shall be held responsible and subject to discipline.
§ 5026 (g) Nothing in this section shall be interpreted to prohibit two or more licensed premises from occupying separate portions of the same parcel of land or sharing common use areas, such as a bathroom, breakroom, hallway, or building entrance.
§ 5026 (h) All structures included as part of the licensed premises shall be permanently affixed to the land by a method that would cause the structure to ordinarily remain affixed for an indefinite period of time. Structures that will not be considered to be permanent structures include, but are not limited to, shipping containers that are not affixed to the land, modular buildings that are not affixed to the land, structures that rest on wheels, or any structure that can be readily moved.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012, 26051.5, 26054 and 26055, Business and Professions Code.
§ 5027 (a) A licensee shall not, without the prior written approval of the Bureau, make a physical change, alteration, or modification of the licensed premises that materially or substantially alters the licensed premises or the use of the licensed premises from the premises diagram originally filed with the license application. A licensee whose licensed premises is to be
materially or substantially changed, modified, or altered is responsible for filing a request for premises modification with the Bureau.
§ 5027 (b) Material or substantial changes, alterations, or modifications requiring approval include, but are not limited to:
(1) The removal, creation, or relocation of a common entryway, doorway, passage, or a means of public entry or exit, when such common entryway, doorway, or passage alters or changes limited-access areas within the licensed premises;
(2) The removal, creation, or relocation of a wall or barrier; or
(3) Changing the activities conducted in or the use of an area identified in the last premises diagram provided to the Bureau.
§ 5027 (c) A licensee shall request approval of a physical change, alteration, or modification in writing, by submitting the Notification and Request Form, BCC-LIC-027 (New 10/18), which is incorporated herein by reference, and the request shall include:
(1) A new premises diagram that conforms to requirements in section 5006 of this division; and
(2) A fee pursuant to section 5014 of this division.
§ 5027 (d) A licensee shall provide additional documentation requested by the Bureau to evaluate the licensee’s request to modify the licensed premises.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012 and 26055, Business and Professions Code.
A licensee shall not sublet any area designated as the licensed premises for the licensee’s commercial cannabis activity.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012 and 26070, Business and Professions Code.
In construing and enforcing the provisions of the Act and the regulations in this division, the act, omission, or failure of an agent, officer, representative, or other person acting for or employed by a licensee, within the scope of his or her employment or office, shall in every case be deemed the act, omission, or failure of the licensee.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26031 and 26110, Business and Professions Code.
Employees or persons retained by a licensee to work within or on a licensed premises or to handle cannabis goods shall be at least 21 years of age.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26140, Business and Professions Code.
(a) All commercial cannabis activity shall be conducted between licensees. Licensed retailers and licensed microbusinesses authorized to engage in retail sales may conduct commercial cannabis activity with customers in accordance with Chapter 3 of this division.
(b) Licensees shall not conduct commercial cannabis activities on behalf of, at the request of, or pursuant to a contract with any person who is not licensed under the Act.
(c) Licensees may conduct business with other licensees irrespective of the M-designation or A-designation on their licenses.
(d) Licensed distributors or licensed microbusinesses authorized to engage in distribution shall only transport and sell cannabis goods designated as “For Medical Use Only,” pursuant to the requirements prescribed by the State Department of Public Health in regulation, to Mdesignated retailers or M-designated microbusinesses authorized to engage in retail sales.
(e) Products designated as “For Medical Use Only,” pursuant to requirements prescribed by the State Department of Public Health in regulation, shall only be sold to medicinal customers by M-designated retailers or M-designated microbusinesses authorized to engage in retail sales.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26001, 26013 and 26053, Business and Professions Code.
§ 5033 (a) All inventory stored on the licensed premises shall be secured in a limited-access area.
§ 5033 (b) A licensee shall not store cannabis goods outdoors.
§ 5033 (c) Employee break rooms, changing facilities, and bathrooms shall be separated from all storage areas.
§ 5033 (d) Each location where cannabis goods are stored must be separately licensed.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012 and 26070, Business and Professions Code.
A determination by a licensee on whether a discrepancy in inventory is significant shall be made in accordance with the following:
§ 5034 (a) A significant discrepancy in inventory means a difference in actual inventory compared to records pertaining to inventory of at least 3 percent of the average monthly sales of the licensee.
§ 5034 (b) For the purposes of this section, average monthly sales shall be calculated by taking a per month average of the total sales for the previous 6 months. If the licensee has not been in operation for at least 6 months, only the months in which the licensee was operating shall be used in determining average monthly sales.
§ 5034 (c) For the purposes of this section, the licensee’s acquisition price shall be used to determine the value of cannabis goods in a licensee’s inventory.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26070, Business and Professions Code.
§ 5035 (a) A licensee shall ensure that the Bureau is notified in writing of a criminal conviction of any owner, either by mail or electronic mail, within 48 hours of the conviction. The written notification to the Bureau shall include the date of conviction, the court docket number, the name of the court in which the licensee was convicted, and the specific offense(s) for which the licensee was convicted.
§ 5035 (b) A licensee shall ensure that the Bureau is notified in writing of a civil penalty or judgment rendered against the licensee or any owner in their individual capacity, either by mail or electronic mail, within 48 hours of delivery of the verdict or entry of judgment, whichever is sooner. The written notification shall include the date of verdict or entry of judgment, the court docket number, the name of the court in which the matter was adjudicated, and a description of the civil penalty or judgment rendered against the licensee.
§ 5035 (c) A licensee shall ensure that the Bureau is notified in writing of an administrative order or civil judgment for violations of labor standards against the licensee or any owner in their individual capacity, either by mail or electronic mail, within 48 hours of delivery of the order. The written notification shall include the date of the order, the name of the agency issuing the order, and a description of the administrative penalty or judgment rendered against the licensee.
§ 5035 (d) A licensee shall ensure that the Bureau is notified in writing of the revocation of a local license, permit, or other authorization, either by mail or electronic mail, within 48 hours of receiving notice of the revocation. The written notification shall include the name of the local agency involved, a written explanation of the proceeding or enforcement action, and the specific violation(s) that led to revocation.
§ 5035 (e) For any notification required under this section, licensees shall use and submit to the Bureau the Notification and Request Form, BCC-LIC-027 (New 10/18), which is incorporated herein by reference.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26030 and 26031, Business and Professions Code.
§ 5036 (a) A licensee shall notify the Bureau and local law enforcement within 24 hours of discovery of any of the following situations:
(1) The licensee discovers a significant discrepancy, as defined in section 5034 of this division, in its inventory.
(2) The licensee discovers diversion, theft, loss, or any other criminal activity pertaining to the operations of the licensee.
(3) The licensee discovers diversion, theft, loss, or any other criminal activity by an agent or employee of the licensee pertaining to the operations of the licensee.
(4) The licensee discovers loss or unauthorized alteration of records related to cannabis goods, customers, or the licensee’s employees or agents.
(5) The licensee discovers any other breach of security.
§ 5036 (b) The notification to the Bureau pursuant to subsection (a) of this section shall be submitted on the Notification and Request Form, BCC-LIC-027 (New 10/18), which is incorporated herein by reference, and shall include the date and time of occurrence of the theft, loss, or criminal activity, the name of the local law enforcement agency that was notified, and a description of the incident including, where applicable, the item(s) that were taken or lost.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26070, Business and Professions Code.
§ 5037 (a) Each licensee shall keep and maintain the following records related to commercial cannabis activity for at least seven years:
(1) Financial records including, but not limited to, bank statements, sales invoices, receipts, tax records, and all records required by the California Department of Tax and Fee Administration (formerly Board of Equalization) under title 18, California Code of Regulations, sections 1698 and 4901.
(2) Personnel records, including each employee’s full name, social security or individual tax payer identification number, date employment begins, and date of termination of employment if applicable.
(3) Training records including, but not limited to, the content of the training provided and the names of the employees that received the training.
(4) Contracts with other licensees regarding commercial cannabis activity.
(5) Permits, licenses, and other local authorizations to conduct the licensee’s commercial cannabis activity.
(6) Security records, except for surveillance recordings required pursuant to section 5044 of this division.
(7) Records relating to the composting or destruction of cannabis goods.
(8) Documentation for data or information entered into the track and trace system.
(9) All other documents prepared or executed by an owner or their employees or assignees in connection with the licensed commercial cannabis business.
§ 5037 (b) All required records shall be prepared and retained in accordance with the following conditions:
(1) Records shall be legible; and
(2) Records shall be stored in a secured area where the records are protected from debris, moisture, contamination, hazardous waste, fire, and theft.
§ 5037 (c) The Bureau may make any examination of the books and records of any licensee as it deems necessary to perform its duties under the Act.
§ 5037 (d) All records are subject to review by the Bureau any time the licensee is exercising the privileges of the license or at any other time as mutually agreed to by the Bureau and the licensee. Prior notice by the Bureau to review records is not necessary. The Bureau may review records outside of the licensee’s standard daily business hours.
§ 5037 (e) Records shall be kept in a manner that allows records to be produced for the Bureau immediately upon request at the licensed premises in either hard copy or electronic form, whichever the Bureau requests.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26160 and 26161, Business and Professions Code.
§ 5038 (a) If a licensee is unable to comply with any licensing requirements due to a disaster, the licensee may notify the Bureau of this inability to comply and request relief from the specific licensing requirement.
§ 5038 (b) The Bureau may exercise its discretion to provide temporary relief from specific regulatory requirements in this division and from other licensing requirements when allowed by law.
§ 5038 (c) Temporary relief from specific licensing requirements shall be issued for a reasonable amount of time in order to allow the licensee to recover from the disaster.
§ 5038 (d) The Bureau may require that certain conditions be followed in order for a licensee to receive temporary relief from specific licensing requirements.
§ 5038 (e) A licensee shall not be subject to an enforcement action for a violation of a licensing requirement in which the licensee has received temporary relief.
§ 5038 (f) For the purposes of this section, “disaster” means condition of extreme peril to the safety of persons and property within the state or a county, city and county, or city caused by such conditions as air pollution, fire, flood, storm, tidal wave, epidemic, riot, drought, terrorism, sudden and severe energy shortage, plant or animal infestation or disease, Governor’s warning of an earthquake or volcanic prediction, or an earthquake, or similar public calamity, other than conditions resulting from a labor controversy, for which the Governor has proclaimed a state of emergency in accordance with Government Code sections 8558 and 8625, or for which a local governing body has proclaimed a local emergency in accordance with Government Code sections 8558 and 8630.
§ 5038 (g) A licensed premises that has been vacated by a licensee due to a disaster shall not be
deemed to have been abandoned or quit under section 5022 of this division.
§ 5038 (h) Notwithstanding subsection (a) of this section, if a licensee needs to move cannabis goods stored on the licensed premises to another location immediately to prevent loss, theft, or degradation of the cannabis goods from the disaster, the licensee may move the cannabis goods without obtaining prior approval from the Bureau if the following conditions are met:
(1) The cannabis goods are moved to a secure location where access to the cannabis goods can be restricted to the licensee, its employees, and contractors;
(2) The licensee notifies the Bureau in writing, by submitting the Notification and Request Form, BCC-LIC-027 (New 10/18), which is incorporated herein by reference, that the cannabis goods have been moved and that the licensee is requesting relief from complying with specific licensing requirements pursuant to subsection (a) of this section within 24 hours of moving the cannabis goods;
(3) The licensee agrees to grant the Bureau access to the location where the cannabis goods have been moved to for inspection; and
(4) The licensee submits in writing the Notification and Request Form, BCC-LIC-027 (New 10/18), incorporated herein by reference, to the Bureau within 14 calendar days of moving the cannabis goods a request for temporary relief that clearly indicates what statutory and regulatory sections relief is requested from, the time period for which the relief is requested, and the reasons relief is needed for the specified amount of time.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26012, Business and Professions Code.
Upon issuance of any license, the licensee shall prominently display the license on the licensed premises where it can be viewed by state and local agencies. If the licensed premises is open to the public, the license shall be displayed in an area that is within plain sight of the public.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26012, Business and Professions Code.
§ 5040 (a) Any advertising or marketing, as defined in Business and Professions Code section 26150, that is placed in broadcast, cable, radio, print, and digital communications:
(1) Shall only be displayed after a licensee has obtained reliable up-to-date audience
composition data demonstrating that at least 71.6 percent of the audience viewing the
advertising or marketing is reasonably expected to be 21 years of age or older;
(2) Shall not use any depictions or images of minors or anyone under 21 years of age;
(3) Shall not contain the use of objects, such as toys, inflatables, movie characters,
cartoon characters, or include any other display, depiction, or image designed in any manner
likely to be appealing to minors or anyone under 21 years of age; and
(4) Shall not advertise free cannabis goods or giveaways of any type of products, including
non- cannabis products. This includes promotions such as:
(A) Buy one product, get one product free;
(B) Free product with any donation; and
(C) Contests, sweepstakes, or raffles.
§ 5040 (b) In addition to the requirements for advertising and marketing in subsection (a) of this section, all outdoor signs, including billboards, shall:
(1) Be affixed to a building or permanent structure;
(2) Comply with the provisions of the Outdoor Advertising Act, commencing with section 5200 of the Business and Professions Code, if applicable; and
(3) Not be located within a 15-mile radius of the California border on an Interstate Highway or on a State Highway that crosses the California border.
§ 5040 (c) For the purposes of this section, “reliable up-to-date audience composition data” means data regarding the age and location demographics of the audience viewing a particular advertising or marketing medium. “Reliable up-to-date audience composition data” does not include data from the most recent United States decennial or special census, or the annual population estimate for California counties published by the Demographic Research Unit, State Department of Finance.
§ 5040 (d) Immediately upon request, a licensee shall provide to the Bureau audience composition data as required in subsection (a) of this section for advertising or marketing placed by the licensee.
§ 5040 (e) If the Bureau determines that audience composition data for advertising or marketing provided by a licensee does not comply with the requirements of subsection (a) of this section, or the licensee fails to provide audience composition data to the Bureau upon request, the licensee shall remove the advertising or marketing placement in question.
§ 5040 (f) In construing and enforcing the advertising provisions of the Act and this division, any action, omission, or failure of an advertising agent, representative, or contractor retained by the licensee shall in every case be deemed the act, omission, or failure of the licensee.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26151 and 26152, Business and Professions Code.
Licensees shall not sell or transport cannabis goods that are labeled as beer, wine, liquor, spirits, or any other term that may create a misleading impression that the product is an alcoholic beverage as defined in Division 9 of the Business and Professions Code.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26054, 26151 and 26152, Business and Professions Code.
§ 5041 (a) Prior to any advertising or marketing from the licensee involving direct, individualized communication or dialogue, the licensee shall use age affirmation to verify that the recipient is 21 years of age or older.
§ 5041 (b) For the purposes of this section, direct, individualized communication or dialogue may occur through any form of communication, including in-person, telephone, physical mail, or electronic.
§ 5041 (c) A method of age verification is not necessary for a communication if the licensee can verify that the licensee has previously had the intended recipient undergo a method of age affirmation and the licensee is reasonably certain that the communication will only be received by the intended recipient.
§ 5041 (d) A licensee shall use a method of age affirmation before having a potential customer added to a mailing list, subscribe, or otherwise consent to receiving direct, individualized communication or dialogue controlled by a licensee.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26151 and 26152, Business and Professions Code.
§ 5041.1 (a) If a licensed distributor, licensed retailer, or licensed microbusiness authorized to engage in distribution or retail sales wishes to sell branded merchandise that is not listed in section 5000, subsection (b), of this division, the licensee must receive written approval from the Bureau.
§ 5041.1 (b) To obtain approval, a licensee must submit a written request to the Bureau for approval to sell a specific item of branded merchandise and provide a photograph of the branded merchandise. Requests may be submitted by mail to the Bureau office or by email to bcc@dca.ca.gov.
§ 5041.1 (c) The licensee shall not sell the merchandise until receiving written approval from the Bureau for the specific item of branded merchandise.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26013 and 26152, Business and Professions Code.
§ 5042 (a) Licensees shall ensure that only employees of the licensee and other authorized individuals access the limited-access areas of the licensed premises
§ 5042 (b) For the purpose of this section, authorized individuals include outside vendors, contractors, or other individuals conducting business that requires access to the limited-access areas.
§ 5042 (c) An individual who enters the limited-access area and is not employed by the licensee shall be escorted by an employee of the licensee at all times while within the limited-access area.
§ 5042 (d) A licensee shall maintain a record of all authorized individuals who are not employees of the licensee who enter the limited-access areas. The record shall include the name of the individual, the company the individual works for, the reason the individual entered the limited-access area, the date, and the times the individual entered and exited the limited-access area. These records shall be made available to the Bureau immediately upon request.
§ 5042 (e) A licensee shall not receive consideration or compensation for permitting an individual to enter the limited-access areas.
§ 5042 (f) Entrances to all limited-access areas shall have a solid door and a lock meeting the requirements of section 5046 of this division. The door shall remain closed when not in use during regular business hours.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26070 and 26160, Business and Professions Code.
All agents, officers, or other persons acting for or employed by a licensee shall display a laminated or plastic-coated identification badge issued by the licensee at all times while engaging in commercial cannabis activity. The identification badge shall, at a minimum, include the licensee’s “doing business as” name and license number, the employee’s first name, an employee number exclusively assigned to that employee for identification purposes, and a color photograph of the employee that clearly shows the full front of the employee’s face and that is at least 1 inch in width and 1.5 inches in height.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26070, Business and Professions Code.
§ 5044 (a) Each licensed premises shall have a digital video surveillance system with a minimum camera resolution of 1280 × 720 pixels.
§ 5044 (b) The video surveillance system shall at all times be able to effectively and clearly record images of the area under surveillance.
§ 5044 (c) Each camera shall be permanently mounted and in a fixed location. Each camera shall be placed in a location that allows the camera to clearly record activity occurring within 20 feet of all points of entry and exit on the licensed premises, and allows for the clear and certain identification of any person and activities in all areas required to be filmed under subsection (d) of this section.
§ 5044 (d) Areas that shall be recorded on the video surveillance system include the following:
(1) Areas where cannabis goods are weighed, packed, stored, loaded, and unloaded for transportation, prepared, or moved within the licensed premises;
(2) Limited-access areas;
(3) Security rooms;
(4) Areas storing a surveillance-system storage device with at least one camera recording the access points to the secured surveillance recording area; and
(5) Entrances and exits to the licensed premises, which shall be recorded from both indoor and outdoor vantage points.
§ 5044 (e) Licensed retailers and licensed microbusinesses authorized to engage in retail sales shall also record point-of-sale areas and areas where cannabis goods are displayed for sale on the video surveillance system. At each point-of-sale location, camera placement must allow for the recording of the facial features of any person purchasing or selling cannabis goods, or any person in the retail area, with sufficient clarity to determine identity.
§ 5044 (f) Cameras shall record continuously 24 hours per day and at a minimum of 15 frames per second (FPS).
§ 5044 (g) The physical media or storage device on which surveillance recordings are stored shall be secured in a manner to protect the recording from tampering or theft.
§ 5044 (h) Surveillance recordings shall be kept for a minimum of 90 calendar days.
§ 5044 (i) Surveillance recordings are subject to inspection by the Bureau, and shall be kept in a manner that allows the Bureau to view and obtain copies of the recordings at the licensed premises immediately upon request. The licensee shall also send or otherwise provide copies of the recordings to the Bureau upon request within the time specified by the Bureau.
§ 5044 (j) Recorded images shall clearly and accurately display the time and date. Time is to be measured in accordance with the standards issued by the United States National Institute of Standards and Technology.
§ 5044 (k) The video surveillance system shall be equipped with a failure notification system that provides notification to the licensee of any interruption or failure of the video surveillance system or video surveillance-system storage device.
§ 5044 (l) If multiple licensed premises are contained within the same building, a single video surveillance system covering the entire building may be used by all of the licensees under the following conditions:
(1) Each applicant or licensee shall disclose on their premises diagram where the surveillance recordings are stored.
(2) Each applicant or licensee shall include in their security operating procedures, submitted with the application pursuant to section 5002(c)(29)(D) of this division, an explanation of how the video surveillance system will be shared, including who is responsible for monitoring the video footage and storing any video recordings.
(3) All licensees shall have immediate access to the surveillance recordings to produce them pursuant to subsection (i) of this section.
(4) All licensees shall be held responsible and subject to discipline for any violations of the video surveillance requirements.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26070, Business and Professions Code.
§ 5045 (a) A licensed retailer or licensed microbusiness authorized to engage in retail sales shall hire or contract for security personnel who are at least 21 years of age to provide on-site security services for the licensed retail premises during the hours of operation. All security personnel hired or contracted for by the licensee shall be licensed by the Bureau of Security and Investigative Services and shall comply with Chapters 11.4 and 11.5 of Division 3 of the Business and Professions Code.
§ 5045 (b) Notwithstanding subsection (a) of this section, a licensed non-storefront retailer or licensed microbusiness who is not engaged in storefront retail sale is not required to hire or contract for security personnel.
§ 5045 (c) If multiple licensed premises are contained within the same building, security personnel may be shared by all of the licensees to cover the entire building under the following conditions:
(1) Each licensee shall include in their security operating procedures, submitted with the application pursuant to section 5002(c)(29)(D) of this division, an explanation of how security personnel will be shared, including who is responsible for employing or contracting the security personnel.
(2) All licensees shall be held responsible and subject to discipline for any violations of the security personnel requirements.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26070, Business and Professions Code.
A licensee shall ensure that the limited-access areas described in section 5042 of this division can be securely locked using commercial-grade, nonresidential door locks. A licensee shall also use commercial-grade, nonresidential door locks on all points of entry and exit to the licensed premises.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26070, Business and Professions Code.
§ 5047 (a) A licensee shall maintain an alarm system as defined in Business and Professions Code section 7590.1(n) at the licensed premises.
§ 5047 (b) A licensee shall ensure a licensed alarm company operator or one or more of its registered alarm agents installs, maintains, monitors, and responds to the alarm system.
§ 5047 (c) Upon request, a licensee shall make available to the Bureau all information related to the alarm system, monitoring, and alarm activity.
§ 5047 (d) If multiple licensed premises are contained within the same building, a single alarm system covering the entire building may be used by all of the licensees under the following conditions:
(1) Each licensee shall include in their security operating procedures, submitted with the application pursuant to section 5002(c)(29)(D) of this division, an explanation of how the alarm system will be shared, including who is responsible for contracting with the alarm company.
(2) All licensees shall have access to and be able to provide the information under subsection (c) of this section.
(3) All licensees shall be held responsible and subject to discipline for any violations of the alarm system requirements.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26070, Business and Professions Code.
§ 5048 (a) A licensee shall create and maintain an active and functional account within the track and trace system prior to engaging in any commercial cannabis activity, including the purchase, sale, test, packaging, transfer, transport, return, destruction, or disposal, of any cannabis goods.
§ 5048 (b) A licensee shall designate one individual owner as the track and trace system account manager. The account manager may authorize additional owners or employees as track and trace system users and shall ensure that each user is trained on the track and trace system prior to its access or use.
(1) The account manager shall attend and successfully complete all required track and trace system training, including any orientation and continuing education.
(2) If the account manager did not complete the required track and trace system training prior to receiving their annual license, the account manager shall sign up for and complete state mandated training, as prescribed by the Bureau, within five calendar days of license issuance.
§ 5048 (c) The account manager and each user shall be assigned a unique log-on, consisting of a username and password. The account manager or each user accessing the track and trace system shall only do so under his or her assigned log-on, and shall not use or access a log-on of any other individual. No account manager or user shall share or transfer his or her log-on, username, or password, to be used by any other individual for any reason.
§ 5048 (d) The account manager shall maintain a complete, accurate, and up-to-date list of all track and trace system users, consisting of their full names and usernames.
§ 5048 (e) A licensee shall monitor all compliance notifications from the track and trace system, and timely resolve the issues detailed in the compliance notification.
(1) A licensee shall keep a record, independent of the track and trace system, of all compliance notifications received from the track and trace system, and how and when compliance was achieved.
(2) If a licensee is unable to resolve a compliance notification within three business days of receiving the notification, the licensee shall notify the Bureau immediately, by submitting the Notification and Request Form, BCC-LIC-027 (New 10/18), which is incorporated herein by reference.
§ 5048 (f) A licensee is accountable for all actions its owners or employees take while logged into or using the track and trace system, or otherwise while conducting track and trace activities.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26067, 26070, 26160 and 26161, Business and Professions Code.
§ 5049 (a) A licensee shall record in the track and trace system all commercial cannabis activity, including:
(1) Packaging of cannabis goods.
(2) Sale and transfer of cannabis goods.
(3) Transportation of cannabis goods to a licensee.
(4) Receipt of cannabis goods.
(5) Return of cannabis goods.
(6) Destruction and disposal of cannabis goods.
(7) Laboratory testing and results.
(8) Any other activity as required pursuant to this division, or by any other licensing authority.
§ 5049 (b) The following information shall be recorded for each activity entered in the track and trace system:
(1) Name and type of the cannabis goods.
(2) Unique identifier of the cannabis goods.
(3) Amount of the cannabis goods, by weight or count, and total wholesale cost of the cannabis goods, as applicable.
(4) Date and time of the activity or transaction.
(5) Name and license number of other licensees involved in the activity or transaction.
(6) If the cannabis goods are being transported:
(A) The licensee shall transport pursuant to a shipping manifest generated through the track and trace system, that includes items (1) through (5) of this subsection, as well as:
(i) The name, license number, and licensed premises address of the originating licensee.
(ii) The name, license number, and licensed premises address of the licensee transporting the cannabis goods.
(iii) The name, license number, and licensed premises address of the destination licensee receiving the cannabis goods into inventory or storage.
(iv) The date and time of departure from the licensed premises and approximate date and time of departure from each subsequent licensed premises, if any.
(v) Arrival date and estimated time of arrival at each licensed premises.
(vi) Driver license number of the personnel transporting the cannabis goods, and the make, model, and license plate number of the vehicle used for transport.
(B) Upon pick-up or receipt of cannabis goods for transport, storage, or inventory, a licensee shall ensure that the cannabis goods received are as described in the shipping manifest, and shall record acceptance or receipt, and acknowledgment of the cannabis goods in the track and trace system.
(C) If there are any discrepancies between the type or quantity of cannabis goods specified in the shipping manifest and the type or quantity received by the licensee, the licensee shall record and document the discrepancy in the track and trace system and in any relevant business record.
(7) If cannabis goods are being destroyed or disposed of, the licensee shall record in the track and trace system the following additional information:
(A) The name of the employee performing the destruction or disposal.
(B) The reason for destruction and disposal.
(C) The entity disposing of the cannabis waste.
(8) Description for any adjustments made in the track and trace system, including, but not limited to:
(A) Spoilage or fouling of the cannabis goods.
(B) Any event resulting in damage, exposure, or compromise of the cannabis goods.
(9) Any other information as required pursuant to this division, or by any other applicable licensing authorities.
§ 5049 (c) Unless otherwise specified, all transactions must be entered into the track and trace system within 24 hours of occurrence.
§ 5049 (d) Licensees shall only enter and record complete and accurate information into the track and trace system, and shall correct any known errors entered into the track and trace system immediately upon discovery.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26067, 26070, 26160, and 26161, Business and Professions Code.
§ 5050 (a) If at any point a licensee loses connectivity to the track and trace system for any reason, the licensee shall prepare and maintain comprehensive records detailing all commercial cannabis activities that were conducted during the loss of connectivity.
§ 5050 (b) The licensee shall notify the Bureau immediately for any loss of connectivity, and shall not transport, receive, or deliver any cannabis goods until such time as connectivity is restored. Licensees shall submit such notices on the Notification and Request Form, BCCLIC-027 (New 10/18), which is incorporated by reference.
§ 5050 (c) Once connectivity has been restored, the licensee shall:
(1) Within three calendar days, enter all commercial cannabis activity that occurred during the loss of connectivity into the track and trace system.
(2) Document the cause for loss of connectivity, and the date and time for when connectivity to the track and trace system was lost and when it was restored.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26067, 26070 and 26160, Business and Professions Code.
§ 5051 (a) In addition to other inventory reconciliation requirements under this division, a licensee shall reconcile the physical inventory of cannabis goods at the licensed premises with the records in the track and trace database at least once every 30 calendar days.
§ 5051 (b) If a licensee finds a discrepancy between its physical inventory and the track and trace system database, the licensee shall conduct an audit, and notify the Bureau of any reportable activity pursuant to section 5036 of this division.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26067, 26070 and 26160, Business and Professions Code.
§ 5052 (a) A licensee operating under a temporary license issued pursuant to section 5001 of this division is not required to record commercial cannabis activity in the track and trace system as otherwise required by this article.
§ 5052 (b) Temporary licensees shall track and record all commercial cannabis activities and information required pursuant to this division and any other provision of law, at a minimum, on paper receipts, invoices, or manifests.
§ 5052 (c) Any commercial cannabis activity conducted between annual license holders shall be recorded in the track and trace system.
§ 5052 (d) Any licensee in operation at the time the annual license is issued shall enter all inventory into the track and trace system no later than 30 calendar days after the track and trace system account manager attends the training required pursuant to section 5048 of this division.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26050.1, 26067, 26070, 26160 and 26161, Business and Professions Code.
§ 5052.1 (a) Licensees shall accept or reject, in whole, shipments of cannabis goods.
§ 5052.1 (b) Notwithstanding subsection (a) of this section, partial shipments of cannabis goods shall be rejected in the following circumstances:
(1) If a licensee receives a shipment containing cannabis goods that differ from those listed on the sales invoice or receipt, the licensee shall reject the portion of the shipment that is not accurately reflected on the sales invoice or receipt.
(2) If a licensee receives a shipment containing any cannabis goods that were damaged during transportation, the licensee shall reject that portion of the shipment that was damaged.
(3) If a licensee receives a shipment containing cannabis goods that is non-compliant with labeling requirements or exceeds its provided expiration date, the licensee shall reject the portion of the shipment that is non-compliant with labeling requirements or expired.
§ 5052.1 (c) The licensee rejecting a shipment of cannabis goods, whether in whole or in part, shall record in the track and trace system, as required by Chapter 1, Article 6 of this division, and indicate on any relevant manifest, invoice, or sales receipt, the specific reason for rejection.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26013, 26067, 26070 and 26161, Business and Professions Code.
§ 5053 (a) If a licensee discovers that a manufactured cannabis good that was purchased from another licensee is defective, the purchasing licensee may return the manufactured cannabis good to the selling licensee only in exchange for a non-defective version of the same type of manufactured cannabis good or in exchange for a manufactured cannabis good of equal value.
§ 5053 (b) Except as provided in subsection (a) of this section, a licensee shall not return cannabis goods purchased from another licensee.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26013 and 26070, Business and Professions Code.
§ 5054 (a) Licensees shall not dispose of cannabis goods, unless disposed of as cannabis waste, defined under section 5000(g) of this division.
§ 5054 (b) Cannabis waste shall be stored, managed, and disposed of in accordance with all applicable waste management laws, including, but not limited to, Division 30 of the Public Resources Code.
§ 5054 (c) Cannabis goods intended for disposal shall remain on the licensed premises until rendered into cannabis waste. The licensee shall ensure that:
(1) Access to the cannabis goods is restricted to the licensee, its employees or agents; and
(2) Storage of the cannabis goods allocated for disposal is separate and distinct from other cannabis goods.
§ 5054 (d) To be rendered as cannabis waste for proper disposal, including disposal as defined under Public Resources Code section 40192, cannabis goods shall first be destroyed on the licensed premises. This includes, at a minimum, removing or separating the cannabis goods from any packaging or container and rendering it unrecognizable and unusable. Nothing in this subsection shall be construed to require vape cartridges to be emptied of cannabis oil prior to disposal, provided that the vape cartridge itself is unusable at the time of disposal.
§ 5054 (e) Cannabis waste on the licensed premises shall be secured in a receptacle or area that is restricted to the licensee, its employees, or an authorized waste hauler.
§ 5054 (f) A licensee shall report all cannabis waste activities, up to and including disposal, into the track and trace system, as required under Chapter 1, Article 6 of this division.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26013 and 26070, Business and Professions Code.
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