AB 1826

Existing law, the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), governs the licensure and regulation of commercial cannabis activities. MAUCRSA prohibits engaging in certain commercial activities with cannabis or a cannabis product that is misbranded or adulterated. Among the conditions for which cannabis or a cannabis product is deemed misbranded, MAUCRSA includes packaging or labeling that does not conform to specified requirements. Among the conditions for which cannabis or a cannabis product is deemed adulterated, MAUCRSA includes concentrations that differ from, or its purity or quality is below, that which it is represented to possess. This bill would create a 3rd category of prohibited cannabis or cannabis products, which would be referred to as having an administrative error. The bill would deem cannabis or cannabis products as having an administrative error if the laboratory conducting compliance testing on the product makes a clerical error in the track and trace system in reporting test results. The bill would also recast certain conditions of misbranding or adulteration as those of administrative error, including, among others, labeling or packaging does not conform to the requirements of MAUCRSA and concentrations that differ from, or its purity or quality is below, that which it is represented to possess. 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. This bill would also grant the department those enforcement powers and duties over cannabis and cannabis products that have an administrative error. The bill would require the notifications described above to include certain documentation supporting the finding of adulteration, misbranding, or administrative error, or the finding of probable cause to issue an embargo, as specified. 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. 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, misbranding, or administrative error, to provide the licensee with an opportunity for a meet and confer on why the cannabis or cannabis product is considered adulterated or misbranded, or to have an administrative error. 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. 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. 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. 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. This bill would also authorize a licensee to request that the department remove the tag or other marking to permit correction if the administrative error can be corrected by proper labeling or additional processing. The bill would require the department to provide the licensee with an opportunity for a meet and confer on an embargo, as specified, and would require the department to work diligently to make a final determination on the embargo order, as provided. The bill 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. 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. 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, upon request of the licensee, and to issue a decision within 48 hours of the conclusion of the hearing. 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. Existing law authorizes the department to issue a citation to a licensee or unlicensed person for any act or omission that violates or has violated any provision of MAUCRSA. This bill would require a citation to include an opportunity to meet and confer on the matter with department personnel, as specified.