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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-11</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Lackey</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Lackey</ns0:Name>
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<ns0:Title> An act to amend Sections 26039.1 and 26039.3 of the Business and Professions Code, relating to cannabis. </ns0:Title>
<ns0:RelatingClause>cannabis</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Cannabis: recall, embargo, and destruction of cannabis and cannabis products.</ns0:Subject>
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<html:p>Existing law, the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), governs the licensure and regulation of commercial cannabis activities. Existing law places specified requirements on the packaging and labeling of cannabis and cannabis products. If the packaging or labeling does not conform to those requirements, the cannabis or cannabis product is deemed misbranded. Existing law prohibits engaging in certain commercial activities with cannabis or a cannabis product that is misbranded or adulterated.</html:p>
<html:p>MAUCRSA establishes the Department of Cannabis Control for the administration and enforcement of its provisions. Existing law gives the department various enforcement powers and duties related to the recall, embargo, seizure, and destruction of cannabis and cannabis products that have been deemed misbranded or adulterated, or
whose sale would otherwise be in violation of MAUCRSA. When the department has evidence that cannabis or a cannabis product has been adulterated or misbranded or when the department issues an embargo, existing law requires the department to notify the licensee.</html:p>
<html:p> This bill would require those notifications to include certain documentation supporting the finding of adulteration or misbranding, or the finding of probable cause to issue an embargo, as specified.</html:p>
<html:p>Existing law authorizes a licensee to conduct a voluntary recall of the affected cannabis or cannabis product and to remediate the cannabis or cannabis product, if approved by the department, otherwise, existing law requires the licensee to destroy the affected cannabis or cannabis product under the supervision of the department.</html:p>
<html:p>This bill would require the department, prior to a voluntary recall by the licensee, and within 5
business of delivery of the notification of adulteration or misbranding, to provide the licensee with an opportunity for a meet and confer on why the cannabis or cannabis product is considered adulterated or misbranded. The bill would prohibit the department from permitting destruction of the product until either the meet and confer process has concluded or the licensee has declined to meet and confer.</html:p>
<html:p>Existing law authorizes the department to issue a mandatory recall if the cannabis or cannabis product creates or poses an immediate and serious threat to human life or health, as specified. Existing law requires the department to provide an opportunity for an informal proceeding on the recall within 5 days, as specified.</html:p>
<html:p>This bill would require the department to provide the evidence supporting the mandatory recall simultaneously with the issuance of the order. The bill would require the department to provide the licensee an
opportunity for a meet and confer on the recall, instead of an informal proceeding, within 5 business days of the order, as specified. The bill would prohibit the department from requiring destruction of cannabis or cannabis product prior to the conclusion of either the meet and confer process or the licensee’s decision not to meet and confer.</html:p>
<html:p>Existing law requires the department to affix an embargo tag or other appropriate marking to cannabis or cannabis product that the department finds or has probable cause to believe is in violation of MAUCRSA, as specified. Existing law prohibits the embargoed cannabis or cannabis product from being removed or disposed of by sale or otherwise until the department or a court gives permission. Existing law authorizes the licensee to request that the department remove the tag or other marking to permit correction if the adulteration or misbranding can be corrected by proper labeling or additional processing, and other requirements
are met. Existing law authorizes the department to remove the tag or other marking if it finds that the embargoed cannabis or cannabis product is not in violation of MAUCRSA, as specified.</html:p>
<html:p>This bill would require the department to work diligently to make a final determination on the embargo order, as provided, and would require the department to remove the embargo tag or other marking within 24 hours of finding that cannabis or a cannabis product is not in violation of MAUCRSA, as specified.</html:p>
<html:p>Existing law authorizes the department to condemn cannabis or a cannabis product that is in violation of MAUCRSA, as specified, and imposes certain notice and hearing requirements on a proceeding for condemnation.</html:p>
<html:p>This bill would require a proceeding for condemnation to be initiated by the department within 10 days of the department’s rejection of a corrective action plan submitted by the
licensee, or within 10 days of the embargo if no corrective plan is submitted, as described. If the cannabis or cannabis product subject to condemnation is a perishable agricultural product, the bill would require the administrative law judge to schedule the hearing no later than 5 business days after the petition for condemnation is filed and to issue a decision within 48 hours of the conclusion of the hearing.</html:p>
<html:p>The bill would prohibit the department from requiring a licensee to conduct a voluntary recall, sign a waiver of liability, or waive any right to an informal meeting or an administrative or judicial hearing or appeal as a condition of the department taking certain actions. Those actions include approving a voluntary recall, authorizing remediation, supervising the destruction of the cannabis or cannabis product, removing an embargo tag, approving a corrective plan, and permitting the destruction of product.</html:p>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
<ns0:BillSection id="id_C99EFBBD-1FA2-4891-A176-1F05B5D767D9">
<ns0:Num>SECTION 1.</ns0:Num>
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Section 26039.1 of the
<ns0:DocName>Business and Professions Code</ns0:DocName>
is amended to read:
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<ns0:Num>26039.1.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
When the department has evidence that cannabis or a cannabis product is adulterated or misbranded, the department shall provide written notice to the licensee.
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The notification shall include a copy of the laboratory certificate of analysis and testing data, if applicable, and a summary of the evidence supporting the finding of adulteration or misbranding, including the identity of the
laboratory, if applicable, the chain of custody documentation, and a description of the sampling methodology used.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The notification shall also state whether or not the department has determined that a mandatory recall will be ordered.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The licensee may conduct a voluntary recall of the affected cannabis or cannabis product and may remediate the cannabis or cannabis product, if approved by the department, or
shall, subject to the requirements in subdivision (d), destroy the affected cannabis or cannabis product under the supervision of the department.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Prior to a voluntary recall by the licensee, the department, within five business days of delivery of the notification required by subdivision (a), shall provide the licensee with an opportunity for a meet and confer on why the cannabis or cannabis product is considered adulterated or misbranded. The meet and confer shall be with department staff who are knowledgeable on the matter. The department shall not permit destruction of the product until either the meet and confer process has concluded or the licensee has declined to meet and confer.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
The department may issue a mandatory recall order and require the licensee to immediately cease distribution of cannabis or a cannabis product and recall the cannabis or cannabis product if the department determines both of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The cultivation, manufacture, distribution, or sale of the cannabis or cannabis product creates or poses an immediate and serious threat to human life or health.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Other procedures available to the department to remedy or prevent the occurrence of the situation would result in an unreasonable delay.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Simultaneously with the issuance of a mandatory recall order, the department shall provide the licensee with a summary of the department’s determination for the recall and the specific evidence upon which the order is based, including, but not limited to, all of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
A copy of the laboratory certificate of analysis and testing data, if applicable.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Chain of custody documentation.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
A detailed description of the sampling procedure.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
A summary of the evidence supporting the finding of adulteration or
misbranding.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Within five business days of issuance of the recall order, the department shall provide the licensee an opportunity for
a meet and confer on the matter, including on the actions required by the order and on why the cannabis or cannabis product should not be recalled. The meet and confer shall be held with department staff who are knowledgeable on the matter. The department shall not permit destruction of the product until either the meet and confer process has concluded or the licensee has declined to meet and confer. Following the
meet and confer or the licensee’s decision not to meet and confer, the order shall be affirmed, modified, or set aside as determined appropriate by the department in a written decision setting out the reasons for the action taken.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
The department’s powers set forth in this section expressly include the power to order
movement, segregation, isolation, or destruction of cannabis or cannabis products, as well as the power to hold cannabis or cannabis products in place.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
If the department determines it is necessary, it may issue the mandatory recall order, may conduct the recall, and may use all appropriate measures to obtain reimbursement from the licensee for any and all costs associated with these orders. All funds obtained by the department from these efforts shall be deposited in the Cannabis Control Fund, and shall be available for use by the department upon appropriation
by the Legislature.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
It is unlawful to move or allow to be moved cannabis or a cannabis product subject to an order issued pursuant to this section unless that person has first obtained written authorization from the department.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
The department shall not require a licensee to conduct a voluntary recall, sign a waiver of liability, or waive any right to an
informal meeting or an administrative or judicial hearing or appeal as a condition of approving a voluntary recall, authorizing remediation, or supervising the destruction of the product.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A licensee that conducts a voluntary recall does not waive any right to an informal meeting or an administrative or judicial hearing or appeal.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A waiver of liability or appeal rights shall be valid only if expressly stated in writing and signed by the licensee following the conclusion of a condemnation proceeding pursuant to Section 26039.3 or civil litigation regarding the matter.
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 26039.3 of the
<ns0:DocName>Business and Professions Code</ns0:DocName>
is amended to read:
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<ns0:Num>26039.3.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
If the department finds or has probable cause to believe that cannabis or a cannabis product is adulterated or misbranded within the meaning of this division, or the sale of the cannabis or cannabis product would be in violation of this division, the department shall affix to the cannabis or cannabis product, or component thereof, a tag or other appropriate marking.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
The department shall give notice that the cannabis or cannabis product is, or is suspected of being, adulterated or misbranded, or the sale of the cannabis or cannabis product would be in violation of this division and has been embargoed and that the cannabis or cannabis product shall not be removed or disposed of by sale or otherwise until permission for removal or disposal is given by the department or a court.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The notice shall be accompanied by a laboratory certificate of analysis and testing data, if applicable, and a summary of the evidence supporting the department’s finding of probable cause to embargo, including the identity of the laboratory, if applicable, chain of custody
documentation, and a description of the sampling methodology used.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
It is unlawful to remove, sell, or dispose of embargoed cannabis or an embargoed cannabis product without written permission of the department or a court. The removal, sale, or disposal of each item of embargoed cannabis or cannabis product without written permission of the department constitutes a violation of this subdivision. A violation of this subdivision is subject to a citation and fine of not more than ten thousand dollars ($10,000).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Notwithstanding paragraph (1), a licensed cultivator may request permission for the continued cultivation or harvesting of the cannabis subject to embargo. The department may authorize, and may impose conditions on, the continued cultivation or harvesting of the cannabis subject to embargo.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
If the adulteration or misbranding can be corrected by proper labeling or additional processing of the cannabis or cannabis product and all of the provisions of this division can be complied with, the licensee may request that the department remove the tag or other marking to permit correction. If, under the supervision of the department, the adulteration or misbranding has been corrected, the department may remove the tag or other marking. Cannabis and cannabis products found at an unlicensed location, or cultivated, processed, produced, or manufactured at an unlicensed location, or derived from an unlicensed source, cannot be corrected and shall be destroyed.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
For any cannabis or a cannabis product that is embargoed, the department shall work diligently to make a
final determination on whether or not the cannabis or cannabis product is adulterated or misbranded, or the sale of the cannabis or cannabis product would be in violation of this division. If the department takes longer than five business days to make a final determination, the department shall provide the affected licensee with weekly updates on the determination process and a summary of remaining action items until a final determination is made.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
If the department finds that cannabis or a cannabis product that is embargoed is not
adulterated or misbranded, or that its sale is not otherwise in violation of this division, the department shall remove the tag or other marking within 24 hours of that determination.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
The cannabis or cannabis product may be destroyed or remediated by the licensee or product owner pursuant to a corrective action plan approved by the
department and under the supervision of the department.
If destroyed, the cannabis or cannabis product shall be destroyed at the expense of the licensee or product owner.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
The department may condemn cannabis or a cannabis product under the provisions of this section.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
(i)
<html:span class="EnSpace"/>
A proceeding for condemnation shall be initiated by the department within 10 days of the department’s rejection of a corrective action plan submitted by the licensee, or
within 10 days of the embargo if no corrective action plan is submitted.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Failure of the department to approve a corrective action plan or initiate condemnation proceedings within this timeframe shall result in the automatic release of the embargo, unless an administrative law judge determines that the department has shown good cause for the delay.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
A proceeding for condemnation shall be subject to appropriate notice to, and the opportunity for a hearing
with regard to, the person or licensee affected in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
Notwithstanding the timelines in Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, if the cannabis or cannabis product subject to condemnation is a perishable agricultural product, the administrative law judge shall schedule the hearing no later than five business days after the petition for condemnation is filed.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The administrative law judge shall issue a decision within 48 hours of the conclusion of the hearing.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Upon a finding by the administrative law judge that the cannabis or cannabis product is adulterated or misbranded, or that its sale is otherwise in violation of this division, the administrative law judge may direct the cannabis or cannabis product to be destroyed at the expense of the licensee or product owner and under the supervision of the department. The licensee or owner of the affected cannabis or cannabis product shall pay fees and reasonable costs, including the costs of storage, testing, and supervision, incurred by the department in investigating and prosecuting the action taken pursuant to this section.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Upon a finding by the administrative law judge that the adulteration or misbranding can be corrected by proper labeling or additional processing of the cannabis or cannabis product and that all provisions of this division can be complied with, the administrative law judge may direct the cannabis or cannabis products to be brought into compliance under the department’s supervision. The licensee shall pay fees and reasonable costs, including the costs of storage, testing, and supervision, incurred by the department in investigating and prosecuting the action. After the costs, fees, and expenses have been paid, the department may release the embargo and remove the tag or other marking and supervise the corrective action.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The department shall not require a licensee to sign a waiver of liability, or to waive any right to an informal meeting or an administrative or judicial hearing or appeal, as a condition of removing an embargo tag, approving a corrective action plan, or permitting the destruction of product.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A waiver of liability or appeal rights shall only be valid if executed following the conclusion of a condemnation proceeding pursuant to this section or civil litigation regarding the matter.
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