Article 3. Licensing

§15014. Fees.

(a) The application fee for an annual license under section 15002, a cannabis event organizer license under section 15600, a temporary cannabis event license under section 15601 for each event, and physical modification of the premises under section 15027 shall be paid by an applicant or licensee as provided by this division. Applicants and licensees shall pay the appropriate fee as outlined in this section.

Application Fee Schedule

License Type	Fee Per Application
Testing Laboratory, Distributor, Retailer, Microbusiness Annual Licenses	$1,000
Cannabis Event Organizer License	$1,000
Temporary Cannabis Event License	$1,000
Physical Modification of Premises for Testing Laboratory, Distributor, Retailer, Microbusiness, and Manufacturing Licenses	$500
Type 6, 7, N, or P Annual Manufacturing Licenses	$1,000
Type S Annual Manufacturing License	$500
Cultivation Annual Licenses	See (f)

(b) The annual licensing fee for each license shall be paid by an applicant after the Department has approved the application. The renewal license fee shall be paid by the licensee as required by section 15020. The Department shall not issue the license until the annual licensing fee has been paid.

(c) To determine the appropriate annual license fee due for testing laboratory, distributor, retailer, and microbusiness license types, the applicant or licensee shall first estimate the gross revenue for the 12-month license period. Based on the license type sought, the applicant or licensee shall identify the appropriate tier category in which their expected gross revenue belongs, as identified in the Annual License Fee Schedule charts found in this section. The license fee associated with the licensing tier category the applicant or licensee has identified using their expected gross revenue shall be the license fee due for the original license or renewal. The following are the annual license fees due for these license types to be paid prior to issuance of a license or renewed license:

Annual License Fee Schedule for Testing Laboratory (Type 8)

Gross Revenue ($ Max. Per License)	Fee Per License
Less than or equal to $160,000	$3,000
More than $160,000 and less or equal to $320,000	$6,000
More than $320,000 and less or equal to $480,000	$8,000
More than $480,000 and less or equal to $800,000	$13,000
More than $800,000 and less or equal to $1.2 million	$20,000
More than $1.2 million and less or equal to $2.0 million	$32,000
More than $2.0 million and less or equal to $2.8 million	$48,000
More than $2.8 million and less or equal to $4.4 million	$72,000
More than $4.4 million	$112,000

Annual License Fee Schedule for Distributor (Type 11 or 13), unless only engaging in transport only self-distribution

Gross Revenue ($ Max. Per License)	Fee Per License
Less than or equal to $1.0 million	$1,500
More than $1.0 million and less or equal to $2.5 million	$6,000
More than $2.5 million and less or equal to $5.0 million	$11,250
More than $5.0 million and less or equal to $10.0 million	$22,500
More than $10.0 million and less or equal to $20.0 million	$45,000
More than $20.0 million and less or equal to $30.0 million	$75,000
More than $30.0 million and less or equal to $50.0 million	$120,000
More than $50.0 million and less or equal to $70.0 million	$180,000
More than $70.0 million	$240,000

Annual License Fee Schedule for Distributor Transport Only Self-Distribution (Type 13)

Gross Revenue ($ Max. Per License)	Fee Per License
Less than or equal to $1,000	$200
More than $1,000 and less or equal to $3,000	$500
More than $3,000	$1,000

Annual License Fee Schedule for Retailer (Type 9 or 10)

Gross Revenue ($ Max. Per License)	Fee Per License
Less than or equal to $500,000	$2,500
More than $500,000 and less or equal to $750,000	$5,500
More than $750,000 and less or equal to $1.0 million	$7,500
More than $1.0 million and less or equal to $1.5 million	$11,000
More than $1.5 million and less or equal to $2.0 million	$14,500
More than $2.0 million and less or equal to $3.0 million	$22,500
More than $3.0 million and less or equal to $4.0 million	$30,500
More than $4.0 million and less or equal to $5.0 million	$38,500
More than $5.0 million and less or equal to $6.0 million	$46,500
More than $6.0 million and less or equal to $7.5 million	$57,000
More than $7.5 million	$96,000

Annual License Fee Schedule for Microbusiness (Type 12)

Gross Revenue ($ Max. Per License)	Fee Per License
Less than or equal to $1.0 million	$5,000
More than $1.0 and less or equal to $2.0 million	$12,000
More than $2.0 and less or equal to $3.0 million	$20,000
More than $3.0 and less or equal to $4.0 million	$32,000
More than $4.0 and less or equal to $6.0 million	$45,000
More than $6.0 and less or equal to $7.0 million	$60,000
More than $7.0 and less or equal to $10.0 million	$80,000
More than $10.0 and less or equal to $20.0 million	$100,000
More than $20.0 and less or equal to $30.0 million	$120,000
More than $30.0 and less or equal to $40.0 million	$140,000
More than $40.0 and less or equal to $50.0 million	$160,000
Gross Revenue ($ Max. Per License)	Fee Per License
More than $50.0 and less or equal to $60.0 million	$180,000
More than $60.0 and less than or equal to $80.0 million	$220,000
More than $80 million	$300,000

(d) The annual license fee for a cannabis event organizer license shall be based on the number of planned operations during the license period as indicated in the chart below.

Annual License Fee Schedule for Cannabis Event Organizers

Planned Operations (Number of Operations)	Fee Per License
0-5 events annually	$3,000
6-10 events annually	$5,000
11-20 events annually	$9,000
Greater than 20 events annually	$20,000

(e) The annual license fee for a manufacturer license shall be based on gross revenue as indicated in the chart below.

1. The applicant shall calculate the gross annual revenue for the licensed premises based on the annual gross sales of cannabis products and, if applicable, the annual revenue received from manufacturing, packaging, labeling or otherwise handling cannabis or cannabis products for other licensees, in the 12 months preceding the date of application.
2. For a new license applicant, the gross annual revenue shall be based on the gross sales and revenue expected during the first 12 months following licensure.
3. For a manufacturer licensee that is also licensed as a distributor or retailer, and that sells or transfers cannabis products manufactured on the licensed premises in a non- arm’s length transaction, the annual gross sales or revenue for such transactions shall be based on the product’s fair market value if it were to be sold in an arm’s length transaction at wholesale.
4. For purposes of this section, an “arm’s length transaction” means 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.

Annual License Fee Schedule for Manufacturing (Type 6, 7, N, P, or S)

Gross Revenue ($ Max. Per License)	Fee Per License
Less than or equal to $100,000	$2,000
More than $100,000 and less or equal to $500,000	$7,500
More than $500,000 and less or equal to $1.5 million	$15,000
More than $1.5 million and less or equal to $3.0 million	$25,000
More than $3.0 million and less or equal to $5.0 million	$35,000
More than $5.0 million and less or equal to $10 million	$50,000
More than $10 million	$75,000

(f) The following are the application fees due for the specified annual cultivation license types to be paid at the time the complete application is submitted to the Department:

Application Fee Schedule for Cultivation

License Type	Fee Per License
Specialty Cottage Outdoor	$135
Specialty Cottage Indoor	$205
Specialty Cottage Mixed-Light Tier 1	$340
Specialty Cottage Mixed-Light Tier 2	$580
Specialty Outdoor	$270
Specialty Indoor	$2,170
Specialty Mixed Light-Tier 1	$655
Specialty Mixed Light-Tier 2	$1,125
Small Outdoor	$535
Small Indoor	$3,935
Small Mixed-Light Tier 1	$1,310
Small Mixed-Light Tier 2	$2,250
Medium Outdoor	$1,555
Medium Indoor	$8,655
Medium Mixed-Light Tier 1	$2,885
Medium Mixed-Light Tier 2	$4,945
Nursery	$520
Processor	$1,040

(g) The following are the annual license fees due for the specified annual cultivation license types to be paid prior to issuance of a license or renewal of a license:

Annual License Fee Schedule for Cultivation

License Type	Fee Per License
Specialty Cottage Outdoor	$1,205
Specialty Cottage Indoor	$1,830
Specialty Cottage Mixed-Light Tier 1	$3,035
Specialty Cottage Mixed-Light Tier 2	$5,200
Specialty Outdoor	$2,410
Specialty Indoor	$19,540
Specialty Mixed-Light Tier 1	$5,900
Specialty Mixed-Light Tier 2	$10,120
Small Outdoor	$4,820
Small Indoor	$35,410
Small Mixed-Light Tier 1	$11,800
Small Mixed-Light Tier 2	$20,235
Medium Outdoor	$13,990
Medium Indoor	$77,905
Medium Mixed-Light Tier 1	$25,970
Medium Mixed-Light Tier 2	$44,517
Nursery	$4,685
Processor	$9,370

(h) All fees are nonrefundable.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012, 26051.5 and 26180, Business and Professions Code.

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§ 15014.1. Equity Fee Relief.

(a) For the purposes of this section, the following definitions apply:

1. “Qualified equity applicant or licensee” means a person who is an owner in a commercial cannabis business pursuant to section 15003(a) and is either:
   1. A locally verified equity applicant or licensee in a jurisdiction with a local equity program as defined in subsection (a)(2); or
   2. An applicant or licensee who qualifies for the fee waiver program under the provisions of subsection (d).
2. “Locally verified equity applicant or licensee” means an applicant or licensee that satisfies the following conditions:
   1. The applicant or licensee has submitted an application to a local jurisdiction to engage in commercial cannabis activity;
   2. The applicant or licensee’s commercial cannabis operation is located within the boundaries of that jurisdiction;
   3. The applicant or licensee meets the requirements of that jurisdiction’s local equity program; and
   4. The applicant or licensee has attested that they meet one of the criteria set in subsection (d).

(b) Commercial cannabis businesses with at least one qualified equity applicant or licensee shall be eligible for equity fee relief in the form of one fee waiver during each calendar year and one fee deferral for each additional license during each calendar year if they satisfy all of the following:

1. The applicant or licensee has submitted a complete application for licensure, in accordance with section 15002, or has satisfied the licensure renewal requirements of section 15020.
2. Only for fee waiver requests, the applicant or licensee expects a gross revenue less than or equal to $5,000,000, or a licensee with a gross revenue less than or equal to $5,000,000 and the applicant has submitted documentation demonstrating gross revenue. Documentation demonstrating gross revenue may include, but is not limited to, a copy of the licensee’s state tax return filed with the California Department of Tax and Fee Administration.
3. The qualified equity applicant or licensee, either individually or in combination with other qualified equity applicants or licensees, owns no less than 50 percent of the commercial cannabis business that is applying for licensure or is licensed.
4. The applicant or licensee has timely submitted a request for equity fee relief with the information enumerated in subsections (c) and (d).
   1. To be eligible for a license fee waiver or deferral in the initial 12-month licensure period, the qualified equity applicant must indicate on the application for commercial cannabis license that they are also applying for equity fee relief from the Department.
   2. To be eligible for a license fee waiver or deferral at the time of renewal, the qualified equity licensee must submit a request for equity fee relief at least 60 calendar days before the expiration of the license. The Department will accept requests for equity fee relief from qualified equity licensees who on the effective date of this section are less than 60 days from the date of license expiration. The Department will provide a refund if the Department determines the qualified equity licensee is eligible for a fee waiver or deferral after the licensee has paid all annual licensing fees, subject to available funding.

(c) To submit a request for equity fee relief, the qualified equity applicant or licensee shall submit all of the following to the Department:

1. A complete list of every qualified equity applicant or licensee which includes the percentage of the aggregate ownership interest held by the qualified equity applicant or licensee in the commercial cannabis business.
2. Contact information for each qualified equity applicant or licensee of the commercial cannabis business, including the name, title, phone number, and email address.
3. Only for equity fee relief requestors that are locally verified equity applicants or licensees in a jurisdiction with a local equity program, an attestation to the following statement: Under penalty of perjury, I hereby declare that I am a locally verified equity applicant or licensee. I further declare that I satisfy at least one of the criteria set forth in California Code of Regulations, title 4, section 15014.1(d). I understand that the Department may investigate the accuracy of these declarations, and that a misrepresentation of fact is cause for rejection of this request for equity fee relief.
4. An attestation that the qualified equity applicant or licensee, either individually or in combination with other qualified equity applicants or licensees, own no less than 50 percent of the commercial cannabis business that is applying for licensure or is licensed.

(d) All applicants or licensees must satisfy at least one of the following criteria to be granted a fee waiver or deferral. Qualified equity applicants or licensees that are locally verified equity applicants may establish that they satisfy at least one of these criteria by attestation, as set forth in subsection (c)(3). Qualified equity applicants or licensees that are not locally verified in a jurisdiction with a local equity program must submit evidence of at least one of the following for each equity applicant or licensee:

1. The qualified equity applicant or licensee was convicted of an offense related to the sale, possession, use, manufacture, or cultivation of cannabis, prior to November 8, 2016. Proof of conviction shall be demonstrated by copies of federal or state court records indicating the disposition of the criminal matter; records reflecting the post- conviction dismissal or expungement of a conviction, including records reflecting the destruction of records under Health and Safety Code section 11361.5; or any other court or law enforcement record that shows proof of conviction.
2. The qualified equity applicant or licensee was arrested for an offense related to the sale, possession, use, manufacture, or cultivation of cannabis, prior to November 8, 2016. Proof of arrest shall be demonstrated by copies of federal or state court records indicating the disposition of the criminal matter, records of expungement documentation, or any other law enforcement record that shows proof of arrest.
3. The qualified equity applicant or licensee resides in a household with a household income less than or equal to 60 percent of the area median income for the local jurisdiction they reside, as reported in the most recent United States decennial or special census.
   1. Proof of income shall be demonstrated by the qualified equity applicant or licensee for each earner in their household using copies of at least one of the following records with a residential address in the local jurisdiction, which is not a post office box, dated within the last two years from the date of the request for equity fee relief:
      1. Individual federal tax returns, state tax returns, and W-2s;
      2. At least two consecutive paystubs;
      3. Proof of eligibility for a general assistance program that provides financial aid to adults without sufficient income or resources, including but not limited to CalFresh, MediCal/CalWORKS, supplemental security income, or social security disability.
   2. For the purposes of this subsection, “income” means the money income received in the preceding calendar year using the income measurement defined by the U.S. Census Bureau in their most recent United States decennial or special census.
4. Proof that the qualified equity applicant or licensee resided for at least five years between 1980 and 2016 in an area with a population that was disproportionately impacted by past criminal justice policies implementing cannabis prohibition during their period of residency and that they satisfy one of the following:
   1. The qualified equity applicant or licensee resided in a census tract that is among the top 25 percent for civilian unemployment and poverty in the state based on the United States Census Bureau’s 2013-2017 American Community Survey; or
   2. The qualified equity applicant or licensee has an immediate family member who was convicted or arrested of an offense related to the sale, possession, use, manufacture, or cultivation of cannabis, prior to November 8, 2016.
   3. For the purposes of this subsection, the following definitions apply:
      1. “An area with a population that was disproportionately impacted by past criminal justice policies implementing cannabis prohibition for at least five years” means a county within California with a per capita drug related arrest rate higher than the state’s per capita drug related arrest rate between 1980 and 2016; these counties are: Alameda, Alpine, Contra Costa, Del Norte, Fresno, Glenn, Humboldt, Imperial, Inyo, Kern, Lake, Los Angeles, Mendocino, Merced, Riverside, Sacramento, San Bernardino, San Diego, San Francisco, San Joaquin, Santa Cruz, Sierra, Solano, Stanislaus, Tehama, Trinity, Tulare, Yolo, and Yuba.
      2. “Immediate family member” means child, stepchild, parent, stepparent, brother, sister, half-brother, half-sister, stepsibling, legal guardian, grandparent, or great grandparent.
   4. Proof of residence shall be demonstrated by providing copies of at least two of the following records with a residential address in the local jurisdiction, which is not a post office box:
      1. California Driver’s License or State Identification Card;
      2. Property tax billing or payment, or evidence that the qualified equity applicant or licensee is otherwise exempt from property tax payment by law;
      3. Signed residential lease agreement, or deed or title to residential real property;
      4. Copies of state or federal tax returns;
      5. School records;
      6. Banking or credit card records;
      7. Voter registration;
      8. Credit reports;
      9. Utility, cable, or internet billing or payment; or
      10. Vehicle titles or proof of vehicle registration.
   5. Proof of an immediate family member’s conviction or arrest shall be demonstrated by copies of federal or state court records indicating the disposition of the criminal matter; records reflecting the post-conviction dismissal or expungement of a conviction, including records reflecting the destruction of records under Health and Safety Code section 11361.5; or any other court or law enforcement record that shows proof of conviction or arrest.
   6. Proof of immediate family member shall be demonstrated by copies of documentation showing a familial relationship, including but not limited to, birth certificates or court records.

(e) Incomplete requests for equity fee relief will be denied. The Department will notify the applicant or licensee that the request for equity fee relief is denied and identify the deficiencies which caused the denial. An applicant or licensee may resubmit subsequent requests for equity fee relief after denial.

(f) The Department will process complete requests for equity fee relief in the order in which the application or renewal for commercial cannabis licensure has been approved by the Department. If a commercial cannabis business has submitted multiple requests for fee waivers, the Department will grant only one fee waiver to the applicant or licensee based on the first application or renewal for commercial cannabis licensure that has been approved by the Department.

(g) Issuance of fee waivers by the Department shall be subject to available funding; thus, all eligible applicants and licensees may not be granted a fee waiver. In the event that insufficient funding is available to issue a fee waiver, the Department will grant a fee deferral to qualified equity applicants and licensees.

(h) Fee deferrals granted by the Department shall be subject to the following conditions:

1. All license fees must be paid in full no later than six months after the issuance or renewal of the license.
2. The licensee’s failure to pay the appropriate licensing fee as required by section 15014, will result in further action being taken by the Department, including, but not limited to, denial of licensure renewal, suspension, or revocation of a license.
3. No fee deferrals will be granted by the Department prior to January 1, 2023.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012, 26051.5, 26180, and 26249, Business and Professions Code.

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§ 15014.2. Fees. Large Cultivation License.

(a) Notwithstanding section 15014, the following are the application fees due for the specified large cultivation license types to be paid at the time the complete application is submitted to the Department:

Application Fee Schedule for Large Cultivation Licenses

Large License Type	Fee Per Application
Outdoor	$1,555
Mixed-light Tier 1	$2,885
Mixed-light Tier 2	$4,945
Indoor	$8,655

(b) Notwithstanding section 15014, the following are the annual license fees due for the aggregate canopy size for the annual cultivation license to be paid prior to issuance of a license, renewal of a license, or a converted license:

License Fee Schedule for Large Outdoor Cultivation

Canopy Size	Fees
Base Annual Fee	$13,990
Per 2,000 sq. ft. of Canopy over 1 acre	$640

License Fee Schedule for Large Mixed-light Tier 1 Cultivation

Canopy Size	Fees
Base Annual Fee	$25,970
Fee Per 2,000 sq. ft over 22,000 sq. ft.	$2,360

License Fee Schedule for Large Mixed-light Tier 2 Cultivation

Canopy Size	Fees
Base Annual Fee	$44,517
Fee Per 2,000 sq. ft over 22,000 sq. ft.	$4,040

License Fees Schedule for Large Indoor Cultivation

Canopy Size	Fees
Base Annual Fee	$77,905
Fee Per 2,000 sq. ft over 22,000 sq. ft.	$7,080

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012, 26051.5, 26060, 26120 and 26180, Business and Professions Code.

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§15015. Payment of Fees.

(a) Any fee specified in this division shall be paid to the Department of Cannabis Control by cash, check, money order, debit card, or credit card. Check and money order payments may be made out to the Department of Cannabis Control.

(b) If the fee is paid by debit or credit card:

1. The payment shall be made through the Department’s online licensing system; and
2. The applicant or licensee may be required to pay any associated processing or convenience fees to the third-party vendor processing the payment on behalf of the Department.

(c) Failure to pay the appropriate licensing fee is grounds for discipline. If the Department determines that the licensee paid an amount less than the appropriate licensing fee under section 15014, the licensee will be required to pay the balance of the appropriate fee and a penalty fee of 50 percent of the appropriate licensing fee. The Department in its discretion may waive the penalty fee.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012, 26051.5 and 26180, Business and Professions Code.

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§15017. Substantially Related Offenses and Criteria for Rehabilitation.

(a) When evaluating whether an applicant or licensee has been convicted of a criminal offense, act, or professional misconduct that is substantially related to the qualifications, functions, or duties of the business for which the application is made, the Department shall consider all of the following criteria:

1. The nature and gravity of the offense;
2. The number of years that have elapsed since the date of the offense; and
3. The nature and duties of the particular license in which the applicant seeks licensure or in which the licensee is licensed.

(b) For the purpose of denial, suspension, or revocation of a license, convictions that are substantially related to the qualifications, functions, or duties of the business for which the application is made include, but are not limited to:

1. A violent felony conviction, as specified in Penal Code section 667.5(c).
2. A serious felony conviction, as specified in Penal Code section 1192.7(c).
3. A felony conviction involving fraud, deceit, or embezzlement.
4. A felony conviction for hiring, employing, or using a minor in transporting, carrying, selling, giving away, preparing for sale, or peddling, any controlled substance to a minor; or selling, offering to sell, furnishing, offering to furnish, administering, or giving any controlled substance to a minor.
5. A felony conviction for drug trafficking with enhancements pursuant to Health and Safety Code section 11370.4 or 11379.8.

(c) For the purpose of denial of a license to engage in commercial cannabis manufacturing, a conviction or violation from any jurisdiction that is substantially related to the qualifications, functions, or duties of the business for which the application is made include:

1. A violation of section 110620, 110625, 110630, 110760, 110765, 110770, 110775, 111295, 111300, 111305, 111440, 111445, 111450, or 111455 of the Health and Safety Code that resulted in suspension or revocation of a license, administrative penalty, civil proceeding, or criminal conviction;
2. A violation of Chapter 4 (sections 111950 through 112130) of Part 6 of Division 104 of the Health and Safety Code that resulted in suspension or revocation of a license, administrative penalty, civil proceeding, or criminal conviction;
3. A conviction under section 382 or 383 of the Penal Code; and
4. A violation identified in subsections (c)(1) or (c)(2) committed by a business entity in which an owner was an officer or had an ownership interest.

(d) Except as provided in subsections (b)(4) and (b)(5) and notwithstanding Chapter 2 (commencing with Section 480) of Division 1.5 of the Business and Professions Code, a prior conviction, where the sentence, including any term of probation, incarceration, or supervised release, is completed, for possession of, possession for sale, sale, manufacture, transportation, or cultivation of a controlled substance is not considered substantially related, and shall not be the sole ground for denial of a license. Conviction for any controlled substance felony, subsequent to licensure, shall be grounds for revocation of a license or denial of the renewal of a license.

(e) When evaluating whether an applicant who has been convicted of a criminal offense, act, or professional misconduct that is substantially related to the qualifications, functions, or duties of the business for which the application is made should be issued a license, the Department shall consider the following criteria of rehabilitation:

1. The nature and gravity of the act, professional misconduct, or offense;
2. Whether the person has a felony conviction based on possession or use of cannabis or cannabis products that would not be a felony if the person was convicted of the offense on the date of the person’s application;
3. The applicant’s criminal record as a whole;
4. Evidence of any act, professional misconduct, or offense committed subsequent to the act, professional misconduct, or offense under consideration that could be considered grounds for denial, suspension, or revocation of a commercial cannabis activity license;
5. The time that has elapsed since commission of the act, professional misconduct, or offense;
6. The extent to which the applicant has complied with any terms of parole, probation, restitution, or any other sanctions lawfully imposed against the applicant;
7. If applicable, evidence of dismissal under Penal Code sections 1203.4, 1203.4a, 1203.41, 1203.42, or pursuant to another state’s similar law;
8. If applicable, evidence the applicant has been granted clemency or a pardon by a state or federal executive;
9. If applicable, a certificate of rehabilitation obtained under Penal Code section 4852.01 or another state’s similar law; and
10. Other evidence of rehabilitation submitted by the applicant.

(f) If an applicant has been denied a license based on a conviction, the applicant may request a hearing pursuant to Business and Professions Code section 26058 to determine if the applicant should be issued a license.

(g) For the purpose of this section, “conviction” means a plea or verdict of guilty or a conviction following a plea of nolo contendere.

Authority cited: Section 26013, Business and Professions Code.
Reference: Sections 480, 481, 482, 26012 and 26057, Business and Professions Code.

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§15018. Additional Grounds for Denial of a License.

In addition to the reasons for denial in Business and Professions Code section 26057, a license may be denied for the following reasons:

(a) The applicant’s proposed premises does not fully comply with standards set in regulation.

(b) The applicant’s proposed or licensed premises is substantially different from the diagram of the proposed premises submitted by the applicant, in that the size, layout, location of common entryways, doorways, or passage ways means of public entry or exit, or identification of limited- access areas within the licensed premises is not the same.

(c) The applicant denied the Department access to the licensed premises or the property identified in the application as the premises.

(d) The applicant made a material misrepresentation on the application.

(e) The applicant did not correct the deficiencies within the application in accordance with sections 15002 and 15012.

(f) The applicant has been denied a license, permit, or other authorization to engage in commercial cannabis activity by a state or local licensing authority.

(g) The applicant’s proposed premises is not in compliance with Division 13 (commencing with Section 21000) of the Public Resources Code.

(h) The applicant has failed to remit taxes as required under the Revenue and Taxation Code.

(i) The applicant may be denied a license for any violations of law related to the operations of the commercial cannabis business or for any violations of law related to licensure.

(j) The applicant has engaged in conduct that is grounds for disciplinary action specified in section 26030 of the Act.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 480, 490, 26012, 26030 and 26050, Business and Professions Code.

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§15019. Excessive Concentration.

(a) In determining whether to grant, deny, or renew a license for a retail premises or microbusiness premises authorized to engage in retail sales, the Department shall consider if an excessive concentration exists in the area where the licensee will operate. For the purposes of this section “excessive concentration” applies when either of the following conditions exist:

1. The ratio of licensees to population within the census tract or census division in which the applicant premises is located exceeds the ratio of licensees to population in the county in which the applicant premises is located, unless denial of the application would unduly limit the development of the legal market so as to perpetuate the illegal market for cannabis goods.
2. The ratio of retail licenses or microbusiness licenses to the population within the census tract, census division, or jurisdiction exceeds that allowable by local ordinance adopted under Business and Professions Code section 26200.

(b) “Population Within the Census Tract or Census Division” as used in this section means the population as determined by the most recent United States decennial or special census. Such population determination shall not operate to prevent an applicant from establishing that an increase of resident population has occurred within the census tract or census division.

(c) “Population in the County” as used in this section shall be determined by the most recent annual population estimate for California counties published by the Demographic Research Unit, State Department of Finance.

(d) Beginning July 1, 2018, the Department shall calculate the ratios described in subsection (a) of this section once every six months using the most current available data. The Department’s consideration of whether to grant, deny, or renew a license shall be based upon the most recent ratio calculated by the Department on the date of the Department’s decision.

(e) The existence of an excessive concentration shall not be considered in determining whether to grant, deny, or extend a temporary license under Business and Professions Code section 26050.1.

(f) The applicant may provide reliable evidence establishing, to the satisfaction of the Department, that a denial of a license would unduly limit the development of the legal market so as to perpetuate the illegal market for cannabis goods.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012 and 26051, Business and Professions Code.

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§15020. Renewal of License.

(a) To timely renew a license, a completed license renewal form and annual license fee pursuant to section 15014 shall be received by the Department from the licensee no earlier than 60 calendar days before the expiration of the license and no later than 5:00 p.m. Pacific Time on the last business day before the expiration of the license if the renewal form is submitted to the Department at its office(s), or no later than 11:59 p.m. on the last business day before the expiration of the license if the renewal form is submitted to the Department through its electronic licensing system. Failure to receive a notice for license renewal does not relieve a licensee of the obligation to renew all licenses as required.

(b) In the event the license is not submitted for renewal prior to the expiration date, the licensee must not sell, transfer, transport, manufacture, test, or distribute any commercial cannabis or cannabis products until the license is renewed.

(c) A licensee may submit a license renewal form up to 30 calendar days after the license expires. Any late renewal form will be subject to a late fee equal to 50 percent of the applicable licensing fee required by subsection (a). A licensee who does not submit a complete license renewal application, including the late fee, to the Department within 30 calendar days after the expiration of the license shall forfeit their eligibility for a license renewal and be required to submit a new license application.

(d) The license renewal form shall contain the following:

1. The name of the licensee. For licensees who are individuals, the applicant shall provide both the first and last name of the individual. For licensees who are business entities, the licensee shall provide the legal business name of the commercial cannabis business.
2. The license number and expiration date.
3. The licensee’s mailing address and licensed premises address.
4. Documentation demonstrating the licensee’s gross revenue for the current licensed period, such as a copy of the licensee’s state tax return filed with the California Department of Tax and Fee Administration. This subsection does not apply to the renewal of cultivation licenses.
5. Documentation of any change to any item listed in the original application under section 15002 that has not been reported to the Department through another process pursuant to the Act or this division.
6. An attestation that all information provided to the Department in the license renewal form and the original application under section 15002 or subsequent notification under sections 15023 and 15024 is accurate and current.
7. If applicable, a limited waiver of sovereign immunity pursuant to section 15009.
8. For a licensee with more than one employee, the licensee shall attest that it employs, or will employ within one year of renewing the license, one supervisor and one employee who has successfully completed a Cal-OSHA 30-hour general industry outreach course offered by a training provider that is authorized by an OSHA Training Institute Education Center to provide the course.

(e) Beginning January 1, 2022, an application for renewal of a license to engage in commercial cannabis cultivation shall include the following records, for each power source indicated on the application for licensure for the previous annual licensed period:

1. Total electricity supplied by local utility provider, name of local utility provider, and greenhouse gas emission intensity per kilowatt hour reported by the utility provider under section 398.4(c) of the Public Utilities Code for the most recent calendar year available at time of submission;
2. Total electricity supplied by a zero net energy renewable source, as set forth in section 398.4(h)(5) of the Public Utilities Code, that is not part of a net metering or other utility benefit;
3. Total electricity supplied from other unspecified sources, as defined in section 398.2(e) of the Public Utilities Code, and other onsite sources of generation not reported to the local utility provider (e.g., generators, fuel cells) and the greenhouse gas emission intensity from these sources; and
4. Average weighted greenhouse gas emission intensity considering all electricity use in subsections (e)(1)-(e)(3).

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012 and 26050, Business and Professions Code.

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§15021. Denial of License.

(a) The Department may deny an application for a new license or a renewal of a license for any reason specified in Business and Professions Code section 26057, and on any additional grounds including grounds for denial under section 15018, and grounds for discipline under the Act or this division.

(b) Upon denial of an application for a license or renewal of a license, the Department shall notify the applicant in writing of the reasons for denial, and the right to a hearing to contest the denial.

(c) The applicant may request a hearing to contest the denial by submitting a written request to the Department at appeals@cannabis.ca.gov.

1. The written request for a hearing must be received by the Department or postmarked within 30 calendar days of service of the notification of denial.
2. If the written request for a hearing is not received within the required timeframe, the applicant’s right to a hearing is waived.
3. Upon timely receipt of the written request for hearing, the Department shall set a date for hearing to be conducted in accordance with chapter 5 (commencing with section 11500) of part 1 of division 3 of title 2 of the Government Code.

(d) If a license application is denied due to an owner’s conviction history, the Department shall notify the applicant of the process for the owner to request a copy of their complete conviction history and question the accuracy or completeness of the record pursuant to Penal Code sections 11122 through 11127.

Authority: Section 26013, Business and Professions Code;
Reference: Sections 26012, 26057 and 26058, Business and Professions Code.

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§15023. Business Modifications.

Business modifications shall be made in accordance with the following:

(a) Changes to standard operating procedures may be made without providing notification to the Department, except as required by the Act or this division. Licensees shall maintain a copy of all current and prior operating procedures as required by section 15037.

(b) If at the time of licensure, a licensee employed fewer than 20 employees and later employs 20 or more employees, within 60 days of employing 20 or more employees, the licensee shall provide to the Department a notarized statement that the licensee will enter into a labor peace agreement and will abide by the terms of the agreement or demonstrate that the commercial cannabis business has entered into a labor peace agreement by providing a copy of the signature page of the agreement.

(c) Licenses are not transferrable or assignable to another person or owner. In the event of the sale or other transfer of the business or operations covered by the licensee, changes in ownership shall be made in accordance with the following:

1. If one or more of the owners change, the new owners shall submit the information required under section 15002(c)(16) for each new owner to the Department within 14 calendar days of the effective date of the ownership change. The business may continue to operate under the active license while the Department reviews the qualifications of the new owner(s) in accordance with the Act and these regulations to determine whether the change would constitute grounds for denial of the license, if at least one existing owner is not transferring their ownership interest and will remain as an owner under the new ownership structure. If all owners will be transferring their ownership interest, the business shall not operate under the new ownership structure until a new license application has been submitted to and approved by the Department, and all application and license fees for the new application have been paid. The former owner’s inventory shall be transferred to the new owner’s track and trace account upon issuance of the license.
   1. A change in ownership occurs when a new person meets the definition of owner in section 15003.
   2. A change in ownership does not occur when one or more owners leave the business by transferring their ownership interest to the other existing owner(s).
2. In cases where one or more owners leave the business by transferring their ownership interest to the other existing owner(s), the owner or owners that are transferring their interest shall provide a signed statement to the Department confirming that they have transferred their interest within 14 calendar days of the change.

(d) When there is a change in financial interest holder(s) in the commercial cannabis business who do not meet the requirements for a new license application under this section, the licensee shall submit the information required by section 15002(c)(15) to the Department within 14 calendar days of the change.

(e) When any of the following changes occur, the licensee shall notify the Department within 14 calendar days of the change:

1. Any change to contact information from the information provided to the Department in the original application.
2. Any change in name if the licensee is an individual, or any change in legal business name if the licensee is a business entity.
3. Any change in business trade names, fictitious business names, or doing business as (“DBA”).
4. Any change in the bond required under section 15002(c)(22).

(f) Licensees may request to add an A-designation or M-designation to their license by sending a notification to the Department signed by at least one owner as defined in section 15003. A licensee shall not operate under the requested designation until they have received approval from the Department.

(g) Microbusiness licensees may add a commercial cannabis activity to their license or remove a commercial cannabis activity from their license if doing so is consistent with the requirement set forth in section 15500(a) that licensees engage in at least three (3) commercial cannabis activities. Licensees shall request the modification by completing a request to modify the licensed premises pursuant to section 15027. A licensee shall not engage in a new commercial cannabis activity until they have paid for the modification and received approval from the Department.

(h) Except as permitted under Business and Professions Code section 26050.2(h), licensees may not be transferred from one premises to another. Licensees shall not operate out of a new premises until they have been issued a new license.

(i) For any business modification or notification under this section, licensees shall use and submit to the Department the Licensee Notification and Request Form, Notifications and Requests to Modify a License, DCC-LIC-027 (Amended 2/22), which is incorporated herein by reference, unless the change relates to contact information and can be made through the Department’s online system.

Authority: Section 26013, Business and Professions Code.
Reference: Section 26012, Business and Professions Code.

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§15024. Death, Incapacity, or Insolvency of a Licensee.

(a) In the event of the death, incapacity, receivership, assignment for the benefit of creditors or other event rendering one or more owners incapable of performing the duties associated with the license, the owner or owners’ successor in interest (e.g., appointed guardian, executor, administrator, receiver, trustee, or assignee) shall notify the Department in writing, within 14 calendar days, by submitting the Licensee Notification and Request Form, Notifications and Requests to Modify a License, DCC-LIC-027 (Amended 2/22), which is incorporated herein by reference.

(b) To continue operations or surrender the existing license, the successor in interest shall submit to the Department the following:

1. The name of the successor in interest.;
2. The name of the owner(s) for which the successor in interest is succeeding and the license number;
3. The phone number, mailing address, and email address of the successor in interest; and
4. Documentation demonstrating that the owner(s) is incapable of performing the duties associated with the license such as a death certificate or a court order, and documentation demonstrating that the person making the request is the owner or owners’ successor in interest such as a court order appointing guardianship, receivership, or a will or trust agreement.

(c) The Department may give the successor in interest written approval to continue operations on the licensed business premises for a period of time specified by the Department:

1. If the successor in interest or another person has applied for a license from the Department for the licensed premises and that application is under review;
2. If the successor in interest needs additional time to destroy or sell cannabis or cannabis products; or
3. At the discretion of the Department.

(d) The successor in interest is held subject to all terms and conditions under which a state cannabis license is held pursuant to the Act.

(e) The approval creates no vested right to the issuance of a state cannabis license.

Authority: Section 26013, Business and Professions Code.
Reference: Section 26012, Business and Professions Code.

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§15024.1. Cannabis and Cannabis Products After Termination of License.

In the event a license is terminated for any reason while cannabis or cannabis products remain on the premises, the following actions may be taken:

(a) The cannabis or cannabis products may be destroyed by the former licensee; or

(b) A licensed distributor or licensed microbusiness authorized to engage in distribution may be authorized by the Department to procure and distribute the former licensee’s entire inventory stock in accordance with the following;

1. A licensed distributor or licensed microbusiness authorized to engage in distribution shall, within 14 calendar days of the termination of the former licensee’s license, submit a written request to the Department, on the Licensee Notification and Request Form, Notifications and Requests Regarding Regulatory Compliance, DCC-LIC-028 (New 2/22), which is incorporated by reference, for authorization to procure the cannabis or cannabis products from the former licensee; and
2. Upon approval from the Department, the licensed distributor or licensed microbusiness authorized to engage in distribution shall transport the cannabis or cannabis products as follows:
   1. Cannabis goods shall be transported to a licensed distribution premises where the distributor shall arrange for laboratory testing and perform quality assurance in accordance with chapter 2. If the cannabis goods have already been tested in accordance with chapter 6 and have a valid certificate of analysis for regulatory compliance testing that is less than 12 months old, the cannabis goods are not required to undergo additional testing.
   2. Cannabis that requires further processing as defined in section 15000(e), or further manufacturing as defined in section 15000(pp), shall be transported to a licensee licensed to conduct the additional processing or manufacturing.
   3. Cannabis or cannabis products that require packaging and labeling shall be transported to a licensee licensed to conduct packaging and labeling of the cannabis or cannabis products.
   4. Cannabis products that require further manufacturing as defined in section 15000(pp) shall be transported to a licensed manufacturer.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26011.5 and 26013, Business and Professions Code.

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§15025. Additional Premises Requirements for Retailers and Microbusinesses Authorized to Engage in Retail.

(a) Licensed retailers and licensed microbusinesses authorized to engage in retail sales shall only serve customers who are within the licensed premises, or at a delivery address that meets the requirements of this division.

1. The sale and delivery of cannabis goods shall not occur through a pass-out window or a slide-out tray to the exterior of the licensed premises.
2. Licensed retailers or licensed microbusinesses authorized to engage in retail sales shall not operate as or with a drive-in or drive-through at which cannabis goods are sold to persons within or about a motor vehicle, except for curbside delivery conducted pursuant to section 15404.

(b) Alcoholic beverages as defined in Business and Professions Code section 23004 shall not be stored or consumed on a licensed premises.

(c) Any licensed retailer or microbusiness authorized to conduct retail sales that is adjacent to another premises engaging in manufacturing, cultivation, or distribution shall be separated from those premises by solid walls that extend from floor to ceiling, and any doors leading to the cultivation, distribution, or manufacturing premises shall remain closed.

(d) Cannabis goods shall not be dispersed in the air throughout the premises or throughout a portion of the premises by an oil diffuser or any other vaporizing device that is intended to disperse the vapor throughout the premises or throughout a portion of the premises. This section shall not be interpreted to prohibit cannabis goods consumption on the premises of a licensed retailer or licensed microbusiness authorized to engage in retail sales that is conducted in accordance with Business and Professions Code section 26200(g).

(e) Notwithstanding subsection (a), a commercial cannabis business may have a drive-in or drive-through window only if, prior to June 1, 2018:

1. The commercial cannabis business received a license or permit from the local jurisdiction for a premises including a drive-in or drive-through window which was disclosed on the local application; or
2. The commercial cannabis business has submitted an application to the local jurisdiction for a license or permit which, at the time of submission of the application, included information that a drive-in or drive-through window was already part of, or proposed to be part of, the premises, and after June 1, 2018, the local jurisdiction approves the premises with a drive-in or drive-through window.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26001, 26012 and 26053, Business and Professions Code.

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§15027. Modification of Premises or Operations.

(a) A licensee shall not, without the prior written approval of the Department, make a physical change, alteration, or modification of the licensed premises that materially or substantially alters the licensed premises or the use of the licensed premises from the premises diagram originally filed with the license application. A licensee whose licensed premises is to be materially or substantially changed, modified, or altered is responsible for filing a request for premises modification with the Department.

(b) Material or substantial changes, alterations, or modifications to a licensed cultivation premises requiring prior approval from the Department are:

1. Modification to any area described in the licensee’s cultivation plan including, but not limited to, the removal, creation, or relocation of canopy, processing, packaging, composting, harvest storage, and storage areas for pesticides and other chemicals.
2. Change in water or power source(s).
3. Any increase or decrease in the total physical size or capacity of the licensed premises.
4. Any physical change that would require a building permit, zoning change, or other approval from the applicable local jurisdiction.

(c) Material or substantial changes, alterations, or modifications to a licensed manufacturing premises that require prior approval from the Department are:

1. The addition of any ethanol, carbon dioxide, or volatile extraction method or extraction unit.
2. Any increase or decrease in the total physical size or capacity of the licensed premises.
3. Any physical change that would require the installation of additional video surveillance cameras or a change in the video surveillance system to meet the requirements of section 15044, or alarm system to meet the requirements of section 15047.
4. Any physical change that would require a building permit, zoning change, or other approval from the applicable local jurisdiction.

(d) Material or substantial changes, alterations, or modifications to a licensed microbusiness premises that require prior approval from the Department are:

1. The addition of a commercial cannabis activity pursuant to section 15500(h).
2. Any material or substantial changes, alterations, or modifications listed in subsections (b), (c), or (e), as applicable to the licensed microbusiness’ commercial cannabis activities.

(e) Material or substantial changes, alterations, or modifications to a licensed distribution, retail, or testing laboratory premises that require prior approval from the Department include, but are not limited to:

1. Any increase or decrease in the total physical size or capacity of the licensed premises.
2. Any physical change that would require the installation of additional video surveillance cameras or a change in the video surveillance system to meet the requirements of section 15044, or alarm system to meet the requirements of section 15047.
3. Any physical change that would require a building permit, zoning change, or other approval from the applicable local jurisdiction.

(f) Licensees shall request approval of a physical change, alteration, or modification through the online licensing system in writing, by submitting the Licensee Notification and Request Form, Notifications and Requests to Modify a License, DCC-LIC-027 (Amended 2/22), which is incorporated herein by reference, and the request shall include:

1. A new premises diagram that conforms to requirements in section 15006; and
2. A fee pursuant to section 15014 for all licensees except licensed cultivators.

(g) A licensee shall provide additional documentation requested by the Department to evaluate the licensee’s request to modify the licensed premises.

(h) Licensees shall notify the Department of all changes, alterations, or modifications to a licensed premises or the licensee’s operations that do not require prior approval pursuant to subsections (b), (c), (d), and (e) through the online licensing system or by submitting the Licensee Notification and Request Form, Notifications and Request to Modify a License, DCC-LIC-027 (Amended 2/22), which is incorporated herein by reference, and a new premises diagram that conforms to requirements in section 15006. Notifications pursuant to this subsection shall be submitted to the Department no later than three (3) business days after the changes, alterations, or modifications have been made to the licensed premises.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012 and 26055, Business and Professions Code.

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§ 15027.1. Conversion to Large and Medium Cultivation Licenses.

(a) A licensee may convert existing cultivation licenses into a Large or Medium Cultivation license if the following requirements are met:

1. The location to be licensed consists of licensed or previously licensed cultivation sites, as listed in section 16201. The licensee must have at least one active license within the boundaries of the proposed premises at the time they request conversion.
2. The licenses to be converted are held by the same person(s) as the requested converted Large or Medium Cultivation license.

(b) To obtain a conversion into a Large or Medium Cultivation license, an eligible licensee shall submit to the Department the following information:

1. The name of the Designated Responsible Party requesting the conversion.
2. The license numbers of the current or previous cultivation licenses to be converted.
3. The physical address(es) for the current or previous cultivation licenses to be converted.
4. A diagram of the proposed premises that meets the requirements of section 15006.
5. A proposed cultivation plan that meets the requirements in section 16309.
6. If the conversion necessitates additional review pursuant to CEQA (division 13 (commencing with section 21000) of the Public Resources Code); the licensee shall provide evidence of compliance with CEQA in accordance with section 15010.
7. The identities of all owners and financial interest holders, as defined in sections 15003 and 15004, for the converted license. The information for all owners required in section 15002, subsection (c)(16) and all information required for financial interest holders in section 15002, subsection (c)(15) shall be submitted to the Department by entering the information into the appropriate fields within the Department’s licensing system.

(c) The Department shall verify that all requirements for conversion have been met. If all requirements have been met, the Department shall notify the licensee in writing that the conversion requirements have been met and they may pay the applicable license fee provided for in section 15014.2 or 15014. The fee associated with the converted license shall be paid within 30 calendar days of the notification from the Department required by this subsection. The converted license will become active on the date the fee associated with the converted license is paid in full. If the licensee has been granted a fee deferral pursuant to Business and Professions Code section 26249, the converted license will become active on the date of the notification from the Department that all conversion requirements have been met and the fee associated with the converted license shall be paid in accordance with the provisions of the fee deferral.

(d) A conversion shall not be subject to an application fee.

(e) Notwithstanding sections 15014.2 and 15014, if time remains on any of the licenses to be converted, the prorated value for each day remaining on each license approved for conversion will be credited to the license fee amount for the converted license. The amount credited shall not exceed the license fee for the converted license.

(f) At the time a converted Large or Medium Cultivation license becomes active, the licenses that are converted or within the boundaries of the converted license shall be cancelled by the Department.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012, 26013, 26050, 26055, 26060.1 and 26061, Business and Professions Code.

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§15034. Significant Discrepancy in Inventory.

A significant discrepancy in inventory means a five percent difference between the licensee’s physical inventory and the inventory recorded in the track and trace system.

Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business and Professions Code.

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§15035. Notification of Criminal Acts, Civil Judgments, Violations of Labor Standards, and Revocation of a Local License, Permit, or Other Authorization After Licensure.

(a) A licensee shall ensure that the Department is notified in writing of a criminal conviction of any owner, either by mail or electronic mail, within 48 hours of the conviction. The written notification to the Department shall include the date of conviction, the court docket number, the name of the court in which the licensee was convicted, and the specific offense(s) for which the licensee was convicted.

(b) A licensee shall ensure that the Department is notified in writing of a civil penalty or judgment rendered against the licensee or any owner in their individual capacity, either by mail or electronic mail, within 48 hours of delivery of the verdict or entry of judgment, whichever is sooner. The written notification shall include the date of verdict or entry of judgment, the court docket number, the name of the court in which the matter was adjudicated, and a description of the civil penalty or judgment rendered against the licensee.

(c) A licensee shall ensure that the Department is notified in writing of an administrative order or civil judgment for violations of labor standards against the licensee or any owner in their individual capacity, either by mail or electronic mail, within 48 hours of delivery of the order. The written notification shall include the date of the order, the name of the agency issuing the order, and a description of the administrative penalty or judgment rendered against the licensee.

(d) A licensee shall ensure that the Department is notified in writing of the revocation of a local license, permit, or other authorization held by the licensee or any owner in their individual capacity, either by mail or electronic mail, within 48 hours of receiving notice of the revocation. The written notification shall include the name of the local agency involved, a written explanation of the proceeding or enforcement action, and the specific violation(s) that led to revocation.

(e) For any notification required under this section, licensees shall use and submit to the Department the Licensee Notification and Request Form, Notifications and Requests to Modify a License, DCC-LIC-027 (Amended 2/22), which is incorporated herein by reference.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26030 and 26031, Business and Professions Code.

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§15036. Notification of Theft, Loss, and Criminal Activity.

(a) A licensee shall notify the Department and local law enforcement within 24 hours of discovery of any of the following situations:

1. The licensee discovers a significant discrepancy, as defined in section 15034, in its inventory.
2. The licensee discovers diversion, theft, loss, or any other criminal activity pertaining to the operations of the licensee.
3. The licensee discovers diversion, theft, loss, or any other criminal activity by an agent or employee of the licensee pertaining to the operations of the licensee.
4. The licensee discovers loss or unauthorized alteration of records related to cannabis or cannabis products, customers, or the licensee’s employees or agents.
5. The licensee discovers any other breach of security.

(b) The notification to the Department pursuant to subsection (a) shall be submitted on the Licensee Notification and Request Form, Notifications and Requests Regarding Regulatory Compliance, DCC-LIC-028 (New 2/22), which is incorporated herein by reference, and shall include the date and time of occurrence of the theft, loss, or criminal activity, the name of the local law enforcement agency that was notified, and a description of the incident including, where applicable, the item(s) that were taken or lost.

Authority: Section 26013, Business and Professions Code.
Reference: Section 26070, Business and Professions Code.

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§15037. General Record Retention Requirements.

(a) Licensees must keep and maintain records in connection with the licensed commercial cannabis business. Records must be kept for at least seven years from the date of creation, unless a shorter time is specified. Records include, but are not limited to:

1. Financial records including, but not limited to, bank statements, sales invoices, receipts, tax records, and all records required by the California Department of Tax and Fee Administration (formerly Board of Equalization) under title 18, California Code of Regulations, sections 1698 and 4901.
2. Personnel records, including each employee’s full name, Social Security number or individual taxpayer identification number, date employment begins, and date of termination of employment, if applicable.
3. Training records including, but not limited to, the content of the training provided and the names of the employees who received the training.
4. Contracts regarding commercial cannabis activity.
5. Permits, licenses, and other local authorizations to conduct the licensee’s commercial cannabis activity.
6. All other documents prepared or executed by an owner or their employees or assignees in connection with the licensed commercial cannabis business.
7. Records required by the Act or this division.

(b) Records must be kept in a manner that allows the records to be produced for the Department in either hard-copy or electronic form.

(c) Records must be legible and accurate. No person may intentionally misrepresent or falsify records.

(d) Records must be stored in a secured area where the records are protected from debris, moisture, contamination, hazardous waste, and theft.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26160 and 26161, Business and Professions Code.

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§15037.1. Licensee Authorization to Release Data to Financial Institutions.

(a) A licensee may authorize the Department to provide information to a financial institution for purposes of facilitating the provision of financial services. The authorization shall be made in writing, through a form prescribed by the Department, which shall include the following information:

1. The name of the licensed business for which the licensee is authorizing the release of information;
2. The business’ license number(s);
3. The financial institution authorized to receive information;
4. The name, phone number, email address, and signature of the owner submitting the authorization;
5. The categories of information specified in subsection (b) that are authorized for release; and
6. An acknowledgement that the authorization to release information includes information that is otherwise protected from disclosure, that the licensee is waiving privilege and confidentiality, and that the scope of the release is strictly limited to the purposes of disclosure to the financial institution.

(b) After receipt of the authorization, the Department shall release the following information, as designated by the licensee, when requested by an authorized financial institution pursuant to section 15037.2 of this division:

1. The license application(s), including renewal applications, excluding information required to be kept confidential pursuant to Penal Code section 11105 and confidential personal information of individual owners of the licensed business;
2. Information captured in the track-and-trace system established pursuant to Business and Professions Code section 26067, including, but not limited to, aggregated sales or transfer information, as applicable; and
3. Documents issued to the licensee pursuant to disciplinary or enforcement proceedings.

(c) A licensee may withdraw the authorization to provide information to a financial institution at any time. The withdrawal shall be made in writing, through a form prescribed by the Department, and shall include the following information:

1. The name of the licensed business for which the licensee is withdrawing the authorization of the release of information;
2. The business’ license number(s);
3. The financial institution from which authorization to receive information is withdrawn; and
4. The name, phone number, email address, and signature of the owner submitting the withdrawal.

Authority: Section 26013, Business and Professions Code.
Reference: Section 26260, Business and Professions Code.

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§15037.2. Financial Institution Request for Licensee Information.

A financial institution, as defined in Business and Professions Code section 26260(c)(3), may request information related to a licensee for purposes of facilitating the provision of financial services for that licensee. The request shall be made in writing, through a form prescribed by the Department, which shall include the following information:

(a) The name of the financial institution;

(b) The name, phone number, email, and signature of the representative of the financial institution requesting information;

(c) The business name and license number of the licensee for which the financial institution is requesting information;

(d) The type of financial services for which the information is requested (including, but not limited to, establishment or maintenance of bank accounts, extending loans, and providing insurance) and whether the request is for consideration of a new service or maintenance of an existing service;

(e) The specific information requested as described in section 15037.1(b), if authorized by the licensee; and

(f) An acknowledgment that use of the information is limited to that information which is necessary for the provision of financial services.

Authority: Section 26013, Business and Professions Code.
Reference: Section 26260, Business and Professions Code.

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§15038. Disaster Relief.

(a) If a licensee is unable to comply with any licensing requirements due to a disaster, the licensee may notify the Department of this inability to comply and request relief from the specific licensing requirement.

(b) The Department may exercise its discretion to provide temporary relief from specific regulatory requirements in this division and from other licensing requirements when allowed by law.

(c) Temporary relief from specific licensing requirements shall be issued for a reasonable amount of time in order to allow the licensee to recover from the disaster.

(d) The Department may require that certain conditions be followed in order for a licensee to receive temporary relief from specific licensing requirements.

(e) A licensee shall not be subject to an enforcement action for a violation of a licensing requirement during the time in which the licensee has received temporary relief and is in compliance with any conditions of relief required by the Department.

(f) For the purposes of this section, “disaster” means condition of extreme peril to the safety of persons and property within the state or a county, city and county, or city caused by such conditions as air pollution, fire, flood, storm, tidal wave, epidemic, riot, drought, terrorism, sudden and severe energy shortage, plant or animal infestation or disease, Governor’s warning of an earthquake or volcanic prediction, or an earthquake, or similar public calamity, other than conditions resulting from a labor controversy, for which the Governor has proclaimed a state of emergency in accordance with Government Code sections 8558 and 8625, or for which a local governing body has proclaimed a local emergency in accordance with Government Code sections 8558 and 8630.

(g) A licensed premises that has been vacated by a licensee due to a disaster shall not be deemed to have been abandoned.

(h) Notwithstanding subsection (a), if a licensee needs to move cannabis or cannabis products stored on the licensed premises to another location immediately to prevent loss, theft, or degradation of the cannabis or cannabis products from the disaster, the licensee may move the cannabis or cannabis products without obtaining prior approval from the Department if the following conditions are met:

1. The cannabis or cannabis products are moved to a secure location where access to the cannabis or cannabis products can be restricted to the licensee, its employees, and contractors;
2. The licensee notifies the Department in writing that the cannabis or cannabis products have been moved and that the licensee is requesting relief from complying with specific licensing requirements pursuant to subsection (a) within 24 hours of moving the cannabis or cannabis products;
3. The licensee agrees to grant the Department access to the location where the cannabis or cannabis products have been moved for inspection; and
4. The licensee submits a request for temporary relief as described in subsection (i) in writing to the Department within 14 calendar days of moving the cannabis or cannabis products.
   2. Requests for temporary disaster relief shall include the following:
      1. Name of the licensed commercial cannabis business requesting relief.
      2. License number issued by the Department.
      3. Premises address.
      4. Contact information for the owner submitting the request, including name, phone number, and email address.
      5. Date of request.
      6. Specific statutes and regulations from which relief is requested.
      7. Time period for which the relief is requested.
      8. Reason(s) for the request, including a clear explanation of how the relief requested is tied to the specific circumstances of the declared disaster.

Authority: Section 26013, Business and Professions Code.
Reference: Section 26012, Business and Professions Code.