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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-19</ns0:ActionDate>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Aguiar-Curry</ns0:AuthorText>
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<ns0:Title> An act to amend Section 22990 of the Business and Professions Code, to amend Section 11006.5 of the Health and Safety Code, and to amend Section 34010 of the Revenue and Taxation Code, relating to cannabis. </ns0:Title>
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<ns0:Subject>Cannabis: cannabinoids.</ns0:Subject>
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<html:p>Chapter 248 of the Statutes of 2025 (AB 8) revised the Sherman Food, Drug, and Cosmetic Law to prohibit industrial hemp raw extract from being incorporated into food, food additives, beverages, or dietary supplements unless the industrial hemp raw extract is comprised of cannabidiol (CBD) or cannabinol (CBN) isolate with a purity level greater than 99% and does not contain any tetrahydrocannabinols or synthetic cannabinoids. AB 8, beginning January 1, 2028, revises and recasts various provisions in conformity with that prohibition. Among those conforming changes, AB 8 excludes CBD isolate from the definition of “cannabis concentrate” for purposes of the California Uniform Controlled Substances Act, which imposes various penalties for the unlawful possession or sale of cannabis concentrate.</html:p>
<html:p>This bill, beginning on January 1, 2028, would also
exclude CBN isolate from that definition of “cannabis concentrate.”</html:p>
<html:p>The Cannabis Tax Law authorizes the California Department of Tax and Fee Administration or a law enforcement agency to seize cannabis or cannabis products from a person who possesses, stores, owns, or has made a sale of those cannabis or cannabis products under certain circumstances. AB 8 expanded the seizure authority under the Cannabis Tax Law to include a circumstance in which the product is possessed, stored, offered for sale, or sold by an unlicensed person or at an unlicensed premises, and is presumed to be a cannabis product for containing or purporting to contain a cannabinoid, including a synthetic cannabinoid, as defined.</html:p>
<html:p>This bill would make nonsubstantive changes to the definitional provisions that AB 8 added to the Cannabis Tax Law. Specifically, the bill would delete a redundant definition of synthetic cannabinoid and would delete a definition
of CBD isolate, which is a term that is not used in the Cannabis Tax Law provisions.</html:p>
<html:p>AB 8 revised the Cigarette and Tobacco Products Licensing Act of 2003 (act) to prohibit a person that is engaged in the business of selling cigarettes or tobacco products from possessing, storing, owning, or making a retail sale of cannabis, cannabis products, or a product presumed to be cannabis, and makes a violation of that prohibition subject to a specified fine and license suspension or revocation, as applicable. Existing law requires all moneys collected pursuant to these provisions to be deposited in the Cigarette and Tobacco Products Compliance Fund and makes all moneys in the fund available for expenditure, upon appropriation by the Legislature, solely for the purpose of implementing, enforcing, and administering the act, including the seizure and destruction of cigarettes and tobacco products.</html:p>
<html:p>This bill would revise that funding
provision to specify that the purpose of implementing, enforcing, and administering the act includes the seizure and destruction of cannabis, cannabis products, and products presumed to be cannabis. </html:p>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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Section 22990 of the
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is amended to read:
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<ns0:Num>22990.</ns0:Num>
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(a)
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All moneys collected pursuant to this division shall be deposited in the Cigarette and Tobacco Products Compliance Fund, which is hereby created in the State Treasury. No moneys in the Cigarette and Tobacco Products Compliance Fund shall be used to supplant state or local General Fund money for any purpose.
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(b)
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All moneys in the Cigarette and Tobacco Products Compliance Fund are available for expenditure, upon appropriation by the Legislature, solely for the purpose of implementing, enforcing, and administering the California Cigarette and Tobacco Products Licensing Act of 2003, including the seizure and destruction of
cigarettes,
tobacco products, cannabis, cannabis products, and products presumed to be cannabis.
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 11006.5 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
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<ns0:Num>11006.5.</ns0:Num>
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<html:p>
(a)
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Before January 1, 2026, “concentrated cannabis” means the separated resin, whether crude or purified, obtained from cannabis.
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(b)
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Beginning on January 1, 2026, and until January 1, 2028, “concentrated cannabis” or “cannabis concentrate” means cannabis that has undergone a process to concentrate one or more active cannabinoids, thereby increasing potency, and includes extracts, oils, hash, dab, shatter, rosin, wax, and the separated resin, whether crude or purified.
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(c)
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Beginning on January 1, 2028, the following apply:
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<html:p>
(1)
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“Concentrated cannabis” or “cannabis concentrate” means cannabis or industrial hemp that has undergone a
process to concentrate one or more active cannabinoids, thereby increasing potency, and includes extracts, oils, hash, dab, shatter, rosin, wax, and the separated resin, whether crude or purified.
</html:p>
<html:p>
(2)
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“Cannabis concentrate” does not include CBD isolate or CBN isolate, as defined in Section 26001 of the Business and Professions Code.
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<ns0:Num>SEC. 3.</ns0:Num>
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Section 34010 of the
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is amended to read:
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<ns0:Num>34010.</ns0:Num>
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<html:p>
(a)
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This part shall be known, and may be cited, as the “Cannabis Tax Law.”
</html:p>
<html:p>
(b)
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For purposes of this part:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“2020–21 fiscal year baseline” means the total amount of funds disbursed in the sub-trust accounts in fiscal year 2021–22 for the third allocation of the fiscal year 2020–21 revenue, pursuant to subdivision (f) of Section 34019, as determined by the Department of Finance.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Arm’s length transaction” shall mean a sale entered into in good faith and for valuable consideration that reflects the fair market value in the open market between two informed and willing parties, neither under any compulsion to participate in the
transaction.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
“Average market price” shall mean both of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
(i)
<html:span class="EnSpace"/>
In an arm’s length transaction, the average retail price determined by the wholesale cost of the cannabis or cannabis products sold or transferred to a cannabis retailer, plus a mark-up, as determined by the department on a biannual basis in six-month intervals on or before July 1, 2022.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Notwithstanding clause (i), the department shall not increase the mark-up amount during the period beginning on and after the operative date of the act amending this section by adding this clause and before July 1, 2021.
</html:p>
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(B)
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In a nonarm’s length transaction, the cannabis retailer’s gross receipts from the retail sale of the cannabis or cannabis products.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
“Cannabis” has the same meaning as set forth in Section 11018 of the Health and Safety Code and shall also mean medicinal cannabis.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
“Cannabis products” has the same meaning as set forth in Section 11018.1 of the Health and Safety Code and shall also mean medicinal concentrates and medicinal cannabis products.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
“Cannabis flowers” means the dried flowers of the cannabis plant as defined by the department.
</html:p>
<html:p>
(7)
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“Cannabis leaves” means all parts of the cannabis plant other than cannabis flowers that are sold or consumed.
</html:p>
<html:p>
(8)
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“Cannabis retailer” means a person required to be licensed pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code as a
retailer, non-storefront retailer, microbusiness, or nonprofit, or any other person otherwise authorized under Division 10 (commencing with Section 26000) of the Business and Professions Code to engage in retail sales.
</html:p>
<html:p>
(9)
<html:span class="EnSpace"/>
“Cultivator” means all persons required to be licensed to cultivate cannabis pursuant to Division 10 (commencing with Section 26000) of
the Business and Professions Code.
</html:p>
<html:p>
(10)
<html:span class="EnSpace"/>
“Department” means the California Department of Tax and Fee Administration or its successor agency.
</html:p>
<html:p>
(11)
<html:span class="EnSpace"/>
“Designated for donation” means medicinal cannabis donated by a cultivator to a cannabis retailer for subsequent donation to a medicinal cannabis patient pursuant to Section 26071 of the
Business and Professions Code.
</html:p>
<html:p>
(12)
<html:span class="EnSpace"/>
“Distributor” means a person required to be licensed as a distributor pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code.
</html:p>
<html:p>
(13)
<html:span class="EnSpace"/>
“Enters the commercial market” means cannabis or cannabis products, except for immature cannabis plants and seeds, that complete
and comply with a quality assurance review and testing, as described in Section 26110 of the Business and Professions Code.
</html:p>
<html:p>
(14)
<html:span class="EnSpace"/>
“Gross receipts” has the same meaning as set forth in Section 6012.
</html:p>
<html:p>
(15)
<html:span class="EnSpace"/>
“Manufacturer” means a person required to be licensed as a manufacturer pursuant to Division 10 (commencing with Section 26000) of
the Business and Professions Code.
</html:p>
<html:p>
(16)
<html:span class="EnSpace"/>
“Medicinal cannabis patient” means a qualified patient, as defined in Section 11362.7 of the Health and Safety Code, who possesses a physician’s recommendation that complies with Article 25 (commencing with Section 2525) of Chapter 5 of Division 2 of the Business and Professions Code, or a qualified patient or primary caregiver for a qualified patient issued a valid identification card pursuant to Section 11362.71 of the Health and Safety Code.
</html:p>
<html:p>
(17)
<html:span class="EnSpace"/>
“Microbusiness” has the same meaning as set forth in Section 26001 of the Business and Professions Code.
</html:p>
<html:p>
(18)
<html:span class="EnSpace"/>
“Nonprofit” has the same meaning as set forth in Section 26070.5 of the Business and Professions Code.
</html:p>
<html:p>
(19)
<html:span class="EnSpace"/>
“Person” has the same meaning as set forth in Section 6005.
</html:p>
<html:p>
(20)
<html:span class="EnSpace"/>
“Retail sale” has the same meaning as set forth in Section 6007.
</html:p>
<html:p>
(21)
<html:span class="EnSpace"/>
“Sale” and “purchase” mean any change of title or possession, exchange, or barter, conditional or otherwise, in any manner or by any means whatsoever, for consideration.
</html:p>
<html:p>
(22)
<html:span class="EnSpace"/>
“Sub-trust accounts” means the sub-trust accounts created under subdivision (f) of Section 34019.
</html:p>
<html:p>
(23)
<html:span class="EnSpace"/>
“Tax fund” means the California Cannabis Tax Fund created by Section
34018.
</html:p>
<html:p>
(24)
<html:span class="EnSpace"/>
“Transfer” means to grant, convey, hand over, assign, sell, exchange, or barter, in any manner or by any means, with or without consideration.
</html:p>
<html:p>
(25)
<html:span class="EnSpace"/>
“Unprocessed cannabis” includes cannabis flowers, cannabis leaves, or other categories of harvested cannabis, categories for unprocessed or frozen cannabis or immature
plants, or cannabis that is shipped directly to manufacturers.
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