California Cannabis Law

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A Guide to California Cannabis Laws

California became the first state to allow medicinal cannabis use. Cannabis is legal in California for both medicinal and adult (recreational) use.

Possession

1 oz

  • Penalty: None
    • Incarceration: None
    • o   Max. Fine: $0

28.5 grams or less, over 18 years, and occurred on school grounds

  • Penalty: Misdemeanor
    • Incarceration: 10 days
    • o   Max. Fine: $500

28.5 grams of less, under 18 years

  • Penalty: Misdemeanor
    • Incarceration: 10 days
    • o   Max. Fine: $250

More than 28.5 grams

  • Penalty: Misdemeanor
    • Incarceration: 6 months
    • Max. Fine: $500

With Intent to Distribute

Any amount

  • Penalty: Misdemeanor
    • Incarceration: 6 months
    • Max. Fine: $500

Sales or Delivery

Any amount

  • Penalty: Misdemeanor
    • Incarceration: 6 months
    • o   Max. Fine: $500

Gift of 28.5 grams or less

  • Penalty: No penalty
    • Incarceration: N/A
    • o   Max. Fine: $100

Over 18 years to an individual 14-17 years

  • Penalty: Felony
    • Incarceration: 3-5 years
    • o   Max. Fine: N/A

Over 18 years to an individual under 14 years

  • Penalty: Felony
    • Incarceration: 3-7 years
    • Max. Fine: N/A

Cultivation

Up to 6 plants

  • Penalty: No penalty
    • Incarceration: None
    • o   Max. Fine: $0

6 plants or more

  • Penalty: Misdemeanor
    • Incarceration: 6 months
    • Max. Fine: $500

Hash & Concentrates

Up to 8 grams

  • Penalty: No penalty
    • Incarceration: None
    • o   Max. Fine: $0

8 grams or more

  • Penalty: Misdemeanor
    • Incarceration: 6 months
    • o   Max. Fine: $500

Unauthorized manufacture

  • Penalty: N/A
    • Incarceration: 16 months – 3 years
    • o   Max. Fine: $500

Chemical manufacture

  • Penalty: N/A
    • Incarceration: 3-7 years
    • Max. Fine: $50,000

Paraphernalia

Sale, delivery, possession with intent, and manufacture with intent

  • Penalty: Misdemeanor
    • Incarceration: 15 days – 6 months
    • o   Max. Fine: $500

Involving a minor at least 3 years junior

  • Penalty: Misdemeanor
    • Incarceration: 1 year
    • Max. Fine: $1,000

Forfeiture

  • Vehicles and other property may be seized for controlled substance violations.

Miscellaneous

  • Using a minor in the unlawful sale or transport of marijuana is a Felony punishable by 3-7 years imprisonment.
  • Inducing a minor to use marijuana is also a Felony punishable by 3-7 years imprisonment.
  • Any violation of the California Uniform Controlled Substance Acts results in a fine up to $150.
  • A person who participates in the illegal marketing of marijuana is liable for civil damages.
  • It is a misdemeanor to loiter in a public place with the intent to commit certain controlled substance offenses.
  • A controlled substance conviction can result in suspension of driving privileges.

Qualifying Illnesses

  • AIDS,
  • Anorexia,
  • Arthritis,
  • Cachexia,
  • Cancer,
  • Glaucoma,
  • Migraines,
  • Multiple sclerosis,
  • Persistent muscle spasms,
  • Seizures, or
  • Any other debilitating condition, including chronic pain or severe nausea.

Application Resources

https://cannabis.ca.gov/applicants/application-resources/

  • Starting a legal cannabis business in California takes time, effort, organization and planning. To help, we created resources to help you apply for a license and technical guides for the licensing systems.
  • The Department of Cannabis Control (DCC) reviews license applications in the order we receive them. The application review process takes time. The more complete your information, the faster the review process will be.
  • Check that your application is complete
  • Contact the city or county where your business is located to confirm that you meet local requirements
  • Review your business owners’ criminal history, if any
  • Review the information you submitted to make sure your business meets the requirements
  • Stay in contact with us as you resolve the issue
  • Provide what’s needed as soon as possible to reduce delays in issuing your license.

License Types

The Department of Cannabis Control (DCC) issues licenses based on the type of cannabis activity that your business will perform. If you will do more than one activity, you may need more than one license.

You must have a valid DCC license before performing any commercial cannabis activity, including:

  • Growing cannabis (cultivation)
  • Transporting cannabis (distribution)
  • Making cannabis products (manufacturing)
  • Testing cannabis or cannabis products (testing laboratory)
  • Selling cannabis (retail)
  • Holding an event where cannabis will be sold (event organizers)

When you know what license type you need, DCC has resources to help you learn:

Cultivation Licenses

Cultivation license types are based on the:

  • Type of production and lighting used
  • Number of plants grown or size of the canopy. The canopy is the area where mature (flowering) plants are grown.

The cultivation license types are:

  • Specialty cottage
    • Specialty cottage outdoor – up to 25 mature plants
    • Specialty cottage indoor – up to 500 square feet of canopy
    • Specialty cottage mixed-light tier 1 and 2 – up to 2,500 square feet of canopy
  • Specialty
    • Specialty outdoor – up to 50 mature plants or up to 5,000 square feet of canopy
    • Specialty indoor – 501 to 5,000 square feet of canopy
    • Specialty mixed-light tier 1 and 2 – 2,501 to 5,000 square feet of canopy
  • Small
    • Small outdoor – 5,001 to 10,000 square feet of canopy
    • Small indoor – 5,001 to 10,000 square feet of canopy
    • Small mixed-light tier 1 and 2 – 5,001 to 10,000 square feet of canopy
  • Medium
    • Medium outdoor – 10,001 square feet to 1 acre of canopy
    • Medium indoor – 10,001 to 22,000 square feet of canopy
    • Medium mixed-light tier 1 and 2 – 10,001 to 22,000 square feet of canopy
  • Large – By law, large size cultivation licenses cannot be issued until after January 1, 2023
  • Nursery – for cultivators that only grow clones, immature plants, seeds or other types of cannabis used for propagation
  • Processor – for cultivators that only trim, cure, dry, grade, package or label cannabis.

Product classifications

  • The Department of Cannabis Control (DCC) classifies cannabis goods sold to consumers.
  • Nonmanufactured cannabis products
  • Nonmanufactured cannabis products are finished goods that only contain cannabis, plants or plant material. Examples include:
  • Packaged flower
  • Pre-rolls that only contain plant material
  • Packaged seeds
  • Immature plants sold at retail

Manufactured cannabis products

  • Manufactured cannabis products are finished goods that contain extracted cannabis or non-cannabis ingredients.

Edible cannabis products

  • Edible cannabis products are consumed by mouth and resemble traditional food and beverages. Examples include:
  • Baked goods
  • Candies and sweets
  • Mints
  • Drink additives
  • Drinks

Cannabis concentrates

  • Cannabis concentrates are made mostly of extracted cannabis. Examples include:
  • Vape cartridges
  • Dab, shatter, wax
  • Tinctures
  • Tablets and pills

Topical cannabis products

  • Topical cannabis products are used on the skin. Examples include:
  • Lotions and creams
  • Balms
  • Patches

Packaging and Labelling

https://cannabis.ca.gov/licensees/requirements-cannabis-goods/

Packaging requirements

Cannabis goods are required to be in packaging that is:

  • Child-resistant
  • Tamper-evident
  • Resealable (if more than one serving)
  • Opaque (if an edible cannabis product)

Labeling requirements

Labels have two parts:

  • Primary panel – the portion of the label most likely to be displayed to the consumer at retail
  • Informational panel – any other part of the label

What cannot be on a label?

Consumers use the information on labels to decide what products they buy and use. That’s why it’s important that labels do not include anything that is false or misleading. Do not:

  • Use the name of a California county, unless 100% of the cannabis was grown there
  • Use designs attractive to children, including:
    • Cartoons
    • Images popularly used to advertise to children
    • Imitations of candy labeling
    • The words “candy,” “candies” or anything similar
  • Make unproven health claims
  • Use the words “organic” or “OCal” unless you are registered with the California Department of Food and Agriculture or California Department of Public Health
  • Market the cannabis good as an alcoholic beverage
  • Include a picture of the product (edibles)

Cannabis Law in Advertising

  • Reflecting sensitivity to interstate marketing of cannabis, Proposition 64 prohibits licensed cannabis businesses from “advertis[ing] or market[ing] on a billboard or similar advertising device located on an Interstate Highway or on a State Highway which crosses the California border.”
  • The BCC later issued rules interpreting this restriction to prohibit only cannabis billboards and other outdoor advertising “within a 15-mile radius of the California border on an Interstate Highway or on a State Highway that crosses the California border.” Cal. Bus. & Prof. Code § 26152 (emphasis added).
  • January 21, 2021, instructing licensees to “not place new advertising or marketing on any interstate highway or state highway that crosses the California border” and to “begin the process of removing current advertising and marketing that meets this criteria.” A broad reading of the terms “interstate highway” and “state highway” could effectively prohibit all outdoor advertising on a vast swath of the state’s roads, far from any border. For instance, U.S. Route 101 runs as a surface road through San Francisco and many Northern California towns before crossing the border into Oregon.
  • Any licensee, and any person acting on behalf of a licensee, must comply with the statutes and regulations governing commercial cannabis advertising or promoting. Failure to do so may result in significant penalties. Any advertising or promoting of commercial cannabis must identify the licensee responsible for the advertising content, including the responsible licensee’s state license number. In addition, all advertising and promoting of commercial cannabis must not:
  • Be published or disseminated while a licensee’s license is suspended.
  • Be located within 1,000 feet of a day care center, school, playground, or youth center.
  • Be published or disseminated without first obtaining reliable up-to-date audience composition data demonstrating that at least 71.6 percent of the audience viewing the advertising or promotion is reasonably expected to be 21 years of age or older.
  • Use any depictions or images of minors or anyone under 21 years of age.
  • Use 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.
  • Advertise free cannabis goods or giveaways of any type of products.
  • Advertise or promote in a manner that is false, untrue, or tends to create a misleading impression as to the effects on health of cannabis consumption.
  • Include any statement concerning a brand or product that is inconsistent with any statement on the labeling thereof.
  • Create the impression that the cannabis originated in a particular place or region, unless the label of the advertised product bears an appellation of origin, and such appellation of origin appears in the advertisement.

Moreover, all outdoor signs and billboards used for commercial cannabis advertising must:

  • Be affixed to a building or permanent structure.
  • Comply with the provisions of the Outdoor Advertising Act, commencing with section 5200 of the Business and Professions Code, if applicable.
  • 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.

Failure to comply with the requirements above, or any other requirements in law, may result in the issuance of a citation or disciplinary action. Each day of violation is considered a separate violation subject to separate fines. Violations by licensed persons may result in citations with fines up to $5,000. Violations may also result in suspension or revocation of the license.

California Cannabis Law at Glance

  • You must be 21 or older to have, purchase or use recreational cannabis. This includes smoking, vaping and eating cannabis-infused products.
  • You may possess 28.5 grams of cannabis plant material (about an ounce) and 8 grams of concentrated cannabis.
  • It is illegal to give or sell retail cannabis to minors.
  • It is illegal to drive under the influence of cannabis.
  • It is illegal to consume, smoke, eat, or vape cannabis in public. It is illegal to open a package containing cannabis or any cannabis products in public. This includes but is not limited to parks and sidewalks, and business and residential areas.
  • It is also illegal to consume cannabis in other locations where smoking is illegal, including bars, restaurants, buildings open to the public, places of employment, and areas within 15 feet of doors and ventilation openings.
  • Even though it is legal under California law, you cannot consume or possess cannabis on federal lands such as national parks, even if the park is in California. Among the areas that are federal lands in the San Francisco Bay Area are the Presidio, Alcatraz Island, the Marin Headlands, and Ocean Beach.
  • You can consume cannabis on private property, but property owners and landlords may ban the use and possession of cannabis on their properties.
  • It is illegal to take your cannabis across state lines, even if you are traveling to another state where cannabis is legal.
  • Only state-licensed establishments may sell retail cannabis products.

Caregiver for Cannabis

  • The definition of a “primary caregiver”
  • You are a “primary caregiver” if you are:
  • designated for that purpose by the patient, and
  • are consistently responsible for the patient’s housing, health, and/or safety.18
  • California’s medical marijuana laws authorize possession, cultivation, transport and administration of medical marijuana, as long as the marijuana is:
  • for the patient’s personal use, and
  • in an amount reasonably related to the patient’s current medical needs.19
  • Under no condition, however, may they sell marijuana, or possess or cultivate more than is reasonably related to the patient’s medical use.

Medical marijuana dispensaries

  • California law also allows the distribution of medical marijuana through non- profit medical marijuana dispensaries, collectives or cooperatives.
  • There are strict state and local requirements for the operation of dispensaries. But legally operating dispensaries may give marijuana to medical marijuana patients and their primary caregivers with an ID card, or sell it to them “at cost.”
  • In the wake of Proposition 64, it is unclear whether medical marijuana dispensaries will continue to operate long-term or will be folded into the new market for legal recreational marijuana.

What are the medical marijuana laws?

  • For one thing, the strict quantity limits applicable to recreational do not apply. Medical marijuana users can, with a doctor’s recommendation, possess as much marijuana as their condition reasonably demands for medical purposes.
  • Additionally, people under 21 may use and cultivate medical marijuana with a doctor’s recommendation (and, if they are under 18, the consent of a parent).

Taxes for Cannabis

  • Cultivation Tax – Beginning July 1, 2022, the cultivation tax no longer applies to harvested cannabis entering the commercial market.
  • Adult use retail sales: California has a statewide 15% cannabis excise tax, as well as a state retail sales tax of 7.25%, and an automatic local sales tax of up to 1%. Local municipalities may, at their discretion, tack on an additional businesses tax of up to 15%. So a customer may pay anywhere from 23% to 38% in tax.
  • Medical marijuana: Medical purchases are not subject to the retail sales tax, but the 15% cannabis excise tax still applies. Municipalities are also able to slap a local tax on medical marijuana purchases.
    • Distributors and manufacturers are no longer required to collect the cultivation tax from cultivators.
    • Cultivators are no longer responsible for paying the cultivation tax to manufacturers or distributors when cultivators sell or transfer cannabis to another licensee.
    • Any cultivation tax collected on harvested cannabis that enters the commercial market on or after July 1, 2022, must be returned to the cultivator that originally paid the cultivation tax or, if unable to be returned to the cultivator, must be paid to California Department of Tax and Fee Administration (CDTFA) as excess tax (see our Industry Topics under the Distributor, Cultivator, or Manufacturer tabs for more information).

To properly calculate the 15 percent cannabis excise tax, cannabis distributors must determine whether the sale or transfer to the cannabis retailer is considered an arm’s length transaction or a non-arm’s length transaction.

As a distributor of cannabis or cannabis products, you are required to calculate and collect the 15 percent cannabis excise tax from cannabis retailers that you supply with cannabis or cannabis products.

Beginning January 1, 2018, cannabis distributors are required to calculate and collect the cannabis excise tax from you on cannabis or cannabis products that they sell or transfer to you. In an arm’s length transaction, your distributor calculates the cannabis excise tax based on the “average market price,” which is computed by applying the CDTFA’s predetermined mark-up rate to the wholesale cost of the cannabis and cannabis products sold or transferred in an arm’s length transaction. The current mark-up rate is posted on the Special Taxes and Fees Rate Page under Cannabis Taxes.

As a cannabis retailer, you are prohibited from giving away any amount of cannabis or cannabis products unless authorized to do so by the California Department of Cannabis Control (DCC), the agency that administers cannabis licensing activities. If you are authorized to give cannabis or cannabis products away free of charge, the cannabis excise tax does not apply; but you do owe use tax on your purchase price of the cannabis or cannabis products.

As a retailer, you are required to collect cannabis excise tax from your customer when you sell cannabis or cannabis products at retail. Therefore, you must collect from your customer the same amount of cannabis excise tax that you paid to your distributor.

As a manufacturer of cannabis products, when you receive unprocessed cannabis from a cultivator, you are required to collect the cultivation tax from the cultivator based on the weight and category of the cannabis.

As a licensed cannabis distributor (excluding transport-only distributors), you are required to collect the cultivation tax from cultivators, manufacturers, or other distributors based on the weight and category of the cannabis. The distributor who conducts the final quality assurance review after the cannabis or cannabis product passes the required testing is the distributor responsible for reporting and paying the cultivation tax to the California Department of Tax and Fee Administration (CDTFA). The cultivation tax must be reported during the reporting period in which the cannabis or cannabis product passes the required testing and quality assurance review, which is when the cannabis or cannabis product enters the commercial market.

Cannabis accessories such as pipes, pipe screens, vape pens and vape pen batteries (without cannabis), rolling papers, and grinders are not subject to the 15 percent cannabis excise tax

when the sales price of cannabis or cannabis products are separately stated. However, as a cannabis retailer, your retail sales of cannabis accessories are subject to sales tax and must be reported on your sales and use tax return.

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