§17801. Notice to Comply.
(a) The Department may issue a Notice to Comply to a licensee for violation(s) of the Act or this division discovered during an investigation or audit or observed during an inspection.
(b) The Notice to Comply shall be in writing and describe the nature and facts of each violation, including a reference to the statute or regulation violated, and may indicate the manner in which the licensee must correct the violation(s) to achieve compliance.
(c) The Department may serve the Notice to Comply personally, by email, or by mail to the licensee or an employee, agent, or person delegated by the licensee to accept notice.
(d) The licensee shall sign and return the Notice to Comply and describe how compliance was achieved within 30 calendar days after the date of personal service or the date of emailing or mailing of the notice or a different date specified by the Department. The Department may also require the licensee to provide a plan for review and approval by the Department on a case-by-case basis.
(e) Failure to correct the violation(s) in the Notice to Comply may result in disciplinary action.
Authority: Section 26013, Business and Professions Code;
Reference: Sections 26012 and 26018, Business and Professions Code.
§17801.1. Notice of Violation.
(a) Until October 1, 2021, the Department may issue a Notice of Violation to a licensee for violation(s) of the Act or this division that shall inform the licensee of:
- The violation(s) alleged;
- The proposed fine amount; and
- The licensee’s right to request a hearing pursuant to subsection (b).
(b) Within 30 calendar days after issuance by the Department, a licensee may appeal a Notice of Violation by submitting a written request for an informal hearing by mail to the Department of Cannabis Control, Legal Affairs Division, 2920 Kilgore Road, Rancho Cordova, CA 95670, or by email to appeals@cannabis.ca.gov. The request shall include the following:
- The licensee’s name, mailing address, and daytime phone number;
- The license number issued by the Department;
- A copy of the Notice of Violation; and
- A clear and concise statement of the basis of the appeal.
(c) If the licensee fails to submit a timely request for hearing pursuant to subsection (b), the Notice of Violation is not appealable and the Department may proceed upon the noticed violation(s) without a hearing.
(d) A hearing requested to appeal a Notice of Violation will be scheduled and conducted in accordance with chapter 5 (commencing with section 11500) of part 1 of division 3 of the Government Code.
(e) For all written requests for a hearing submitted by licensees and received by the Department prior to October 1, 2021, with hearings scheduled to take place on or after October 1, 2021, the following will occur:
- Informal hearing proceedings noticed prior to October 1, 2021, shall be converted to adjudicative proceedings under chapter 5 (commencing with section 11500) of part 1 of division 3 of the Government Code.
- Any scheduled informal hearings will be vacated, and a new hearing date, location and time will be noticed by the Department.
Authority cited: Section 26013, Business and Professions Code.
Reference: Sections 26012, 26031 and 26031.5, Business and Professions Code.
§17801.5. Embargo of Cannabis or Cannabis Products.
(a) The Department may embargo cannabis or cannabis products to prevent their sale, disposal, or removal from the location when the Department has probable cause to believe the cannabis or cannabis products are adulterated or misbranded or the sale would otherwise be in violation of the Act or this division.
(b) To embargo cannabis or cannabis products, the Department shall:
- Provide initial notice to the licensee or product owner that the cannabis or cannabis products are subject to embargo and the reason for the embargo. Initial notice may be oral or written and may be provided in person or by telephone, mail, facsimile transmission, email, or other electronic means;
- Affix a tag or marking to the cannabis or cannabis products, or component thereof, subject to embargo; and
- Provide an inventory of the embargoed items to the licensee or product owner.
(c) The Department shall provide a supplemental written notice to the licensee or product owner of the embargoed items that includes the following:
- The factual and legal bases for the embargo;
- A description of the cannabis or cannabis products under embargo;
- A request for a written plan to address the items under embargo and the issues(s) that resulted in the embargo;
- A summary of the proceedings for condemnation in accordance with chapter 5 (commencing with section 11500) of part 1 of division 3 of title 2 of the Government Code;
- Notification that the embargoed items cannot be removed from embargo, sold, or disposed of without authorization of the Department or a court; and
- The penalty for violation of the embargo.
(d) The licensee or product owner may submit a written plan to the Department that describes how the licensee or product owner will address the items under embargo and the issue(s) that resulted in the embargo.
- If the Department determines that the plan will resolve the issue(s) that resulted in the embargo, and that all of the provisions of the Act and this division can be complied with, the Department will approve the plan and supervise the completion of the plan.
- If the Department cannot approve the plan, or the Department does not receive a response from the licensee within seven (7) calendar days after providing the notice described in subsection (c), the Department may initiate condemnation proceedings in accordance with Business and Professions Code section 26039.3(f).
(e) A licensee or product owner or their authorized representative may agree in writing to the voluntary condemnation and destruction of the cannabis and cannabis products subject to embargo. Destruction and disposal of the cannabis or cannabis products shall be at the licensee or product owner’s expense and shall be conducted with the approval of and under the supervision of the Department.
(f) A licensee or product owner shall not remove the tag or marking from cannabis or cannabis products under embargo. A licensee or product owner shall not undertake corrective action or destruction of the items under embargo unless the Department has provided written approval and removed the embargo tag.
(g) A licensee or product owner shall not remove from embargo, sell, or dispose of any cannabis or cannabis products under embargo without written permission of the Department or a court. Each item removed, sold, or disposed of without written permission of the Department or a court constitutes a separate violation of the Act.
(h) A licensed cultivator or a microbusiness authorized to engage in cultivation may request permission to continue cultivation or harvesting of cannabis under embargo. The request shall be made to the Department in writing at compliance@cannabis.ca.gov and shall specify the cultivation or harvesting activities in which the licensee requests to engage. The Department may, in its sole discretion, authorize and impose conditions on the continued cultivation or harvesting of the cannabis under embargo.
(i) Cannabis and cannabis products found, cultivated, processed, produced, or manufactured at an unlicensed location, or derived from an unlicensed source, cannot be corrected and shall be destroyed.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26039.3, Business and Professions Code.
§17802. Citations; Orders of Abatement; Administrative Fines.
(a) The Department may issue citations containing orders of abatement and fines against a licensee, or an unlicensed person, for any acts or omissions that are in violation of any provision of the Act or this division, or any another California laws applicable to cannabis licensees including, but not limited to, state labor law.
(b) The Department may issue a citation under this section to a licensee for a violation of a term or condition contained in a decision placing that licensee on probation.
(c) Each citation may contain either order(s) of abatement, monetary fine(s), or both, and shall:
- Be in writing and describe with particularity the nature of the violation, including a reference to the statute or regulation determined to have been violated;
- Fix a reasonable time for abatement of the violation if the citation contains an order of abatement;
- Assess an administrative fine of up to $5,000 per violation, per day, by a licensee and up to $30,000 per violation, per day, by an unlicensed person if the citation contains a fine;
- Be served personally or by certified mail; and
- Inform the licensee or person that they may request an informal conference, or contest the citation, or both, pursuant to section 17803.
(d) Fines issued with a citation must be paid within 30 calendar days after service of the citation, unless the fine is contested. If a citation is not appealed and the fine is not paid, the full amount of the assessed fine shall be added to the fee for renewal of the license. A license shall not be renewed without payment of the renewal fee and fine.
(e) The amount of any fine assessed by the Department under this section shall take into consideration the factors listed in Business and Professions Code section 26031.5(a)(1)- (3).
(f) Nothing in this section shall be deemed to prevent the Department from filing an accusation to suspend or revoke a license where grounds for such suspension or revocation exist.
Authority cited: Section 26013, Business and Professions Code.
Reference: Sections 26012, 26030 and 26031.5, Business and Professions Code.
§17803. Contesting Citations.
(a) A cited licensee or person may, within 30 calendar days after service of the citation, contest the citation by submitting to the Department a written request for a hearing, conducted in accordance with chapter 5 (commencing with section 11500) of part 1 of division 3 of the Government Code. If a hearing is not requested, it is waived and payment of a fine will not constitute an admission of the violation charged.
(b) In addition to requesting a hearing provided for in subsection (a), the cited licensee or person may, within 15 calendar days after service of the citation, submit a written request for an informal conference with the Department regarding the acts or omissions charged in the citation.
(c) The Department shall, within 15 calendar days after receipt of the written request, hold an informal conference with the cited licensee or person and/or their legal counsel or authorized representative.
(d) At the conclusion of the informal conference, the Department may affirm, modify, or dismiss the citation, including any fines levied or orders of abatement issued. A written decision stating the reasons for the decision shall be mailed to the cited licensee or person and their legal counsel, if any, within 15 calendar days after the date of the informal conference. This decision shall be deemed to be a final order with regard to the citation issued, including the levied fine and the order of abatement, if any.
(e) If the citation is dismissed, any request for a hearing shall be deemed withdrawn. If the citation is affirmed or modified, the cited licensee or person may either withdraw the request for a hearing or proceed with the administrative hearing process.
(f) If the citation, including any fines levied or orders of abatement issued, is modified, the citation originally issued shall be considered withdrawn and new citation issued. If a hearing is requested for the subsequent citation, it shall be requested within 30 calendar days after issuance of the citation.
Authority cited: Section 26013, Business and Professions Code.
Reference: Sections 26012, 26016 and 26031.5, Business and Professions Code.
§17804. Citation Compliance.
(a) If a citation with an order of abatement is issued, the time to abate or correct a violation as provided for in the order of abatement may be extended for good cause. If a cited licensee or person who has been issued an order of abatement is unable to complete the correction within the time set forth in the citation because of conditions beyond their control after the exercise of reasonable diligence, the cited licensee or person may request an extension of time from the Department in which to complete the correction. The request must be in writing and made within the time set forth for abatement.
(b) When a citation is not contested, or if it is contested and the cited licensee or person does not prevail, failure to abate the violation within the time allowed or pay a fine that was imposed shall constitute a separate violation.
(c) Failure to timely comply with an order of abatement or pay a fine that was imposed may result in further action being taken by the Department, including, but not limited to, suspension or revocation of a license, or further administrative or civil proceedings.
Authority cited: Section 26013, Business and Professions Code.
Reference: Sections 26012 and 26031.5, Business and Professions Code.
§17805. Minor Decoys.
(a) Peace officers may use a person under 21 years of age to attempt to purchase cannabis goods, for the purposes of enforcing the Act and to apprehend licensees, employees, or agents of licensees who sell cannabis goods to minors. For purposes of this section, a “minor” is a person under 21 years of age.
(b) The following minimum standards shall apply to the use of a minor decoy:
- At the time of the operation, the decoy shall be less than 20 years of age.
- A decoy shall either carry identification showing the decoy’s correct date of birth or carry no identification. A decoy who carries identification shall present it upon request to any seller of cannabis goods.
- A decoy shall truthfully answer any questions about their age.
- Following any completed sale, but not later than the time a citation, if any, is issued, the peace officer directing the decoy shall make a reasonable attempt to enter the licensed premises or respond to the location where the licensee is located and have the minor decoy who purchased cannabis goods identify the alleged seller of the cannabis goods.
Authority cited: Sections 26013 and 26140, Business and Professions Code.
Reference: Section 26140, Business and Professions Code.
§17806. Attire and Conduct.
(a) No licensee shall allow the following:
(b) Employment or use of any person in the sale or service of cannabis goods in or upon the licensed premises while such person is unclothed or in such attire, costume, or clothing as to expose to view any portion of the breast below the top of the areola or of any portion of the pubic hair, anus, cleft of the buttocks, vulva, or genitals.
(c) Employment or use of the services of any host or other person to mingle with the patrons while such host or other person is unclothed or in such attire, costume, or clothing as described in subsection (a).
(d) Encouraging or permitting any person on the licensed premises to touch, caress, or fondle the breasts, buttocks, anus, or genitals of any other person.
(e) Permitting any employee or person to wear or use any device or covering, exposed to view, which simulates the breast, genitals, anus, pubic hair, or any portion thereof.
Authority cited: Section 26013, Business and Professions Code.
Reference: Section 26011.5, Business and Professions Code.
§17807. Entertainers and Conduct.
(a) Live entertainment is permitted on a licensed premises, except that no licensee shall permit any person to perform acts of or acts that simulate:
- Sexual intercourse, masturbation, sodomy, bestiality, oral copulation, flagellation, or any sexual acts that are prohibited by law.
- Touching, caressing, or fondling of the breast, buttocks, anus, or genitals.
- Displaying of the buttocks, breasts, pubic hair, anus, vulva, or genitals.
(b) No licensee shall permit any person to use artificial devices or inanimate objects to depict any of the prohibited activities described in this section.
(c) No licensee shall permit any person to remain in or upon the licensed premises who exposes to public view any portion of their breast, buttocks, genitals, or anus.
Authority cited: Section 26013, Business and Professions Code.
Reference: Section 26011.5, Business and Professions Code.