Article 2 - Agreements

California Business and Professions Code — §§ 26301-26308

Sections (8)

Added by Stats. 2022, Ch. 396, Sec. 3. (SB 1326) Effective January 1, 2023.

(a)The Governor may enter into an agreement with another state or states authorizing medicinal or adult-use commercial cannabis activity, or both, between entities licensed under the laws of the contracting state and entities operating with a state license, provided that both of the following criteria are met:

(1)The commercial cannabis activities are lawful and subject to licensure under the laws of the contracting state.

(2)With respect to the interstate transportation of cannabis or cannabis products, the agreement prohibits both of the following:

(A)The transportation of cannabis and cannabis products by

any means other than those authorized under both the laws of the contracting state and the regulations of the department.

(B)The transportation of cannabis and cannabis products through the jurisdiction of a state, district, commonwealth, territory, or possession of the United States that does not authorize that transportation.

(b)Notwithstanding any other law, the execution of, and compliance with the terms of, an agreement does not constitute a project for purposes of the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code).

§ 26302

Added by Stats. 2022, Ch. 396, Sec. 3. (SB 1326) Effective January 1, 2023.

(a)Notwithstanding any other law, a foreign licensee may engage in commercial cannabis activity with a state licensee and a state licensee may engage in commercial cannabis activity with a foreign licensee, subject to the requirements and limitations set forth in this chapter.

(b)A foreign licensee shall not engage in commercial cannabis activity within the boundaries of this state without a state license, or engage in commercial cannabis activity within a local jurisdiction without a license, permit, or other authorization issued by the local jurisdiction.

(c)A foreign licensee shall be subject to the jurisdiction of this state for the purpose of actions taken for violation of California commercial cannabis laws and regulations.

§ 26303

Added by Stats. 2022, Ch. 396, Sec. 3. (SB 1326) Effective January 1, 2023.

(a)An agreement shall require that the contracting state impose requirements on foreign licensees with regard to cannabis and cannabis products to be sold or otherwise transferred or distributed within this state that meet or exceed the requirements applicable to state licensees, including all of the following:

(1)Enforceable public health and safety standards that are equivalent to the requirements of this division.

(2)Mandatory participation in a system administered by the state to regulate and track the cultivation, manufacturing, distribution, transportation, sale, and destruction of cannabis and cannabis

products from seed to sale.

(3)Standards for the testing of cannabis or cannabis products that meet or exceed the standards applicable to testing laboratories licensed under this division.

(4)Requirements for the packaging and labeling of cannabis and cannabis products that meet or exceed the packaging and labeling requirements established pursuant to Chapter 12 (commencing with Section 26120).

(5)Requirements for quality assurance and inspection of cannabis or cannabis products that meet or exceed the requirements applicable to cannabis or cannabis products cultivated, manufactured, or sold by state licensees.

(6)Restrictions on marketing, labeling, and

advertising within this state by foreign licensees that meet or exceed the restrictions on state licensees established in Section 26063 and Chapter 15 (commencing with Section 26150).

(7)A process for the identification of adulterated or misbranded cannabis products, and the destruction of those products, using standards that meet or exceed the standards and procedures established pursuant to this division.

(b)An agreement shall require that the contracting state impose restrictions upon advertising, marketing, labeling, or sale within the contracting state that meet or exceed the restrictions established in Section 26063.

§ 26304

Added by Stats. 2022, Ch. 396, Sec. 3. (SB 1326) Effective January 1, 2023.

(a)An agreement shall include provisions requiring the department and the appropriate regulatory authorities of the contracting state to address public health and welfare emergencies concerning cannabis or cannabis products that are sold or intended for sale within this state, including for the prompt recall or embargo of adulterated or misbranded cannabis or cannabis products.

(b)An agreement shall include provisions requiring the appropriate regulatory authorities of each state to investigate instances of alleged noncompliance with the commercial cannabis regulatory programs upon request by the other state and in accordance with mutually agreed-upon procedures. An

agreement shall include provisions requiring the contracting state to

reasonably cooperate with California investigations concerning foreign licensees, and requiring the department to reasonably cooperate with investigations by the contracting state concerning persons or entities holding state licenses.

§ 26305

Added by Stats. 2022, Ch. 396, Sec. 3. (SB 1326) Effective January 1, 2023.

An agreement shall include provisions determined by the Governor to promote the inclusion and support of individuals and communities in the cannabis industry who are linked to populations or neighborhoods that were negatively or disproportionately impacted by cannabis criminalization.

§ 26306

Added by Stats. 2022, Ch. 396, Sec. 3. (SB 1326) Effective January 1, 2023.

An agreement shall provide for collection of all applicable taxes.

§ 26307

Added by Stats. 2022, Ch. 396, Sec. 3. (SB 1326) Effective January 1, 2023.

The Governor is exempt from the rulemaking procedures and requirements of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) when entering into agreements or amendments to agreements, provided that prior to execution of an agreement or amendment to an agreement, the Governor shall do both of the following:

(a)Submit the proposed agreement or amendment to the Joint Legislative Budget Committee for review and comment. The committee shall have 60 days to review the proposed agreement or amendment and to submit written recommendations to the Governor. The committee shall only submit a recommendation

to the Governor if a majority of the members agree to that recommendation. The Governor shall consider all recommendations submitted by the committee and may revise the proposed agreement or amendment to incorporate the recommendations. If the Governor does not incorporate any recommendation submitted by the committee, the Governor shall set forth, in writing, the reasons for not incorporating that recommendation.

(b)Post the proposed agreement or amendment on the department’s internet website for public comment for 30 days. The comments received shall be considered by the Governor.

§ 26308

Added by Stats. 2022, Ch. 396, Sec. 3. (SB 1326) Effective January 1, 2023.

(a)An agreement entered into pursuant to this chapter shall not take effect unless one of the following occurs:

(1)Federal law is amended to allow for the interstate transfer of cannabis or cannabis products between authorized commercial cannabis businesses.

(2)Federal law is enacted that specifically prohibits the expenditure of federal funds to prevent the interstate transfer of cannabis or cannabis products between authorized commercial cannabis businesses.

(3)The United States Department of Justice issues an opinion or memorandum allowing

or tolerating the interstate transfer of cannabis or cannabis products between authorized commercial cannabis businesses.

(4)The Attorney General issues a written opinion, through the process established pursuant to Section 12519 of the Government Code, that state law

authorization, under an agreement pursuant to this chapter, for medicinal or adult-use commercial cannabis activity, or both, between foreign licensees and state licensees will not result in significant legal risk to the State of California under the federal Controlled Substances Act, based on review of applicable law, including federal judicial decisions and administrative actions.

(b)The department shall notify the Governor and the appropriate policy committees of the Legislature upon the occurrence of an event described in subdivision (a), and shall post the notification on the department’s internet website.