Chapter 2

Applicable to All Licensed Cannabis Distributors in California

Chapter 2 (Distributors) of the Bureau of Cannabis Control ("Bureau" or "BCC") Text of Regulations covers the compliance regulations specific to licensed cannabis distributors in California.

Chapter 2. DISTRIBUTORS | Table of Contents

§ 5300. Distribution Activities.

A licensed distributor shall distribute only cannabis goods, cannabis accessories, and licensees’ branded merchandise or promotional materials.

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

§ 5301. Storage Services.

§ 5301 (a) A licensed distributor may provide storage services, including storage-only services that are unrelated to the quality assurance and laboratory testing processes, to a licensed cultivator, licensed manufacturer, licensed microbusiness, licensed retailer, or another licensed distributor.

§ 5301 (b) A licensed distributor may provide storage services to other licensees for cannabis goods
packaged as they will be sold at retail, cannabis accessories, and licensees’ branded
merchandise or promotional materials only.

§ 5301 (c) A licensed distributor shall ensure that each batch of cannabis goods that are stored for another licensee are stored in accordance with section 5302 of this division.

§ 5301 (d) Notwithstanding subsection (b) of this section, a licensed distributor shall not store live plants, except for seeds, on the licensed premises.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26070 and 26110, Business and Professions Code.

§ 5302. Storage of Batches for Testing.

In addition to the information required in section 5002 of this division, an application for a testing laboratory license includes the following:

§ 5302 (a) A licensed distributor shall ensure that all cannabis goods batches are stored separately
and distinctly from other cannabis goods batches on the licensed distributor’s premises.

§ 5302 (b) A licensed distributor shall ensure a label with the following information is
physically attached to each container of each batch:

(1) The name, license number, and licensed premises address of the licensed manufacturer or
licensed cultivator who provided the batch;

(2) The date of entry into the licensed distributor’s storage area;

(3) The unique identifiers and batch number associated with the batch;

(4) A description of the cannabis goods with enough detail to easily identify the batch;

(5) The weight of or quantity of units in the batch; and

(6) The best-by, sell-by, or expiration date of the batch, if any.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26110 and 26120, Business and Professions Code.

§ 5303. Packaging, Labeling, and Rolling.

§ 5303 (a) A licensed distributor may package, re-package, label, and re-label cannabis, including pre-rolls, for retail sale. All packages of cannabis, including pre-rolls, shall comply with the following:

(1) Until January 1, 2020, all packages shall meet the following requirements: 

(A) The package shall protect the cannabis, including pre-rolls, from contamination and shall not expose the cannabis or pre-rolls to any harmful substance.

(B) The package shall be tamper-evident. 

(C) If the package of cannabis or pre-rolls contains more than one serving, then the packaging shall be resealable. 

(D) The package shall not imitate any package used for goods that are typically marketed to children.

(2) Beginning January 1, 2020, all packages shall meet the requirements of subsection (a)(1) of this section and shall also meet the following requirements:

(A) The package shall be child-resistant until the package is first opened. For purposes of this division, the following packages are considered child-resistant:

(i) Any package that has been certified as child-resistant under the requirements of the Poison Prevention Packaging Act of 1970 Regulations (16 C.F.R. §1700.15(b)(1)) (Rev. July 1995), which is hereby incorporated by reference.

(ii) Plastic packaging that is at least 4 mils thick and heat-sealed without an easy-open tab, dimple, corner, or flap.

(B) The package shall be labeled with the statement “This package is not child-resistant after opening.”

(3) Notwithstanding subsections (a)(1)-(a)(2) of this section, immature plants and seeds shall not be required to be packaged in child-resistant, tamper-evident, and resealable packaging.

§ 5303 (b) A licensed distributor shall not process cannabis, but may roll pre-rolls that consist exclusively of any combination of flower, shake, leaf, or kief. Pre-rolls shall be rolled prior to regulatory compliance testing. 

§ 5303 (c) Licensed distributors may label and re-label a package containing manufactured cannabis goods with the amount of cannabinoids and terpenoids based on regulatory compliance testing results.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26013 and 26120, Business and Professions Code.

§ 5303.1. Net Weight of Dried Flower.

For purposes of this division, the net weight on any package of dried flower shall not be considered inaccurate if the actual weight is within plus or minus 3% of the labeled weight.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26013, 26120 and 26152, Business and Professions Code.

§ 5304. Testing Arrangements.

After taking physical possession of a cannabis goods batch, the licensed distributor shall contact a licensed testing laboratory and arrange for a laboratory employee to come to the licensed distributor’s licensed premises to select a representative sample for laboratory testing.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26104 and 26110, Business and Professions Code.

§ 5305. Testing Sample.

§ 5305 (a) The licensed distributor shall ensure that the batch size from which the sample is taken meets the requirements of this division.

§ 5305 (b) A licensed distributor or an employee of the licensed distributor shall be physically present to observe the laboratory employee obtain the sample of cannabis goods for testing and shall ensure that the increments are taken from throughout the batch.

§ 5305 (c) The sampling shall be video recorded with the batch number stated verbally or in writing on the video at the beginning of the video and a visible time and date indication on the video recording footage. The video recordings shall be maintained for 90 calendar days by the licensed distributor.

§ 5305 (c) After the sample has been selected, both the licensed distributor and the laboratory employee shall sign and date the chain of custody form pursuant to section 5706 of this division, attesting to the sample selection having occurred. 

§ 5305 (e) After the sample has been selected, both the licensed distributor and the laboratory employee shall sign and date the chain of custody form pursuant to section 5706 of this division, attesting to the sample selection having occurred.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26104 and 26110, Business and Professions Code.

§ 5305.1 Re-sampling.

Once a sample has been obtained from a batch for regulatory compliance testing, a licensed distributor may not arrange for or allow another licensed testing laboratory to sample or re- sample the same batch for regulatory compliance testing, unless all of the requirements of section 5705 subsection (g) of this division are met.

Authority: Section 26013, Business and Professions Code. 
Reference: Sections 26100, 26104 and 26110, Business and Professions Code.

§ 5306. Laboratory Testing Results.

§ 5306 (a) A sample batch “passes” a laboratory test when the sample meets specifications in Chapter 6 of this division.

§ 5306 (b) When a batch from a manufactured or harvest batch passes, the cannabis goods may be transported to one or more licensed retailers, licensed distributors, or licensed microbusinesses. A printed copy of the certificate of analysis for regulatory compliance testing shall accompany the batch and be provided to the licensee receiving the cannabis goods.

§ 5306 (c) A batch “fails” a laboratory test when the sample does not meet specifications in
Chapter 6 of this division.

§ 5306 (d) If a failed batch may be remediated pursuant to section 5727 of this division, a licensed distributor may transport or arrange for the transportation of the batch to a licensed manufacturer for remediation in accordance with the following:

(1) The licensed distributor shall ensure that a corrective action plan is submitted by a license manufacturer to the State Department of Public Health, or by a licensed microbusiness authorized to engage in manufacturing to the Bureau, within 30 calendar days of issuance of the certificate of analysis for regulatory compliance testing by the licensed testing laboratory.

(2) The licensed distributor shall ensure that the licensed manufacturer or licensed microbusiness authorized to engage in manufacturing begins remediating the cannabis goods within 30 calendar days of receiving approval from the State Department of Public Health or the Bureau to remediate the cannabis goods.

(3) If the licensed distributor is unable to arrange for a licensed manufacturer or licensed microbusiness authorized to engage in manufacturing to remediate the cannabis goods within 30 calendar days of issuance of the certificate of analysis for regulatory compliance testing by the licensed testing laboratory, the licensed distributor shall destroy the cannabis goods immediately.

§ 5306 (e) A licensed distributor shall destroy a batch that failed laboratory testing and cannot be remediated pursuant to section 5727 of this division within 30 calendar days of issuance of the certificate of analysis for regulatory compliance testing by the licensed testing laboratory.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26070, 26100, 26104 and 26110, Business and Professions Code.

§ 5307. Quality-Assurance Review.

When a licensed distributor receives a certificate of analysis for regulatory compliance testing from the licensed testing laboratory or upon transfer from another licensed distributor stating that the batch meets specifications required by law, the licensed distributor shall ensure the following before transporting the cannabis goods, packaged as they will be sold at retail, to one or more licensed retailers or licensed microbusinesses authorized to engage in retail sales:

§ 5307 (a) The certificate of analysis for regulatory compliance testing that the licensed distributor received from the licensed testing laboratory or another licensed distributor is the certificate of analysis that corresponds to the batch;

§ 5307 (b) The date on the certificate of analysis for the regulatory compliance testing is less than 12 months old;

§ 5307 (c) The label on the cannabis goods is consistent with the certificate of analysis for regulatory compliance testing regarding cannabinoid content and contaminants required to be listed by law as follows:

(1) If the cannabis goods are labeled with the content for cannabinoids, terpenoids, Total THC, and/or Total CBD prior to receiving the certificate of analysis for regulatory compliance testing, the licensed distributor shall ensure that the labeled amounts are accurate in accordance with section 5307.1 of this division, and

(2) If the cannabis goods are not labeled with the content for cannabinoids, terpenoids, Total THC, and/or Total CBD prior to receiving the certificate of analysis for regulatory compliance testing, the licensed distributor shall label the cannabis goods with the amounts listed on the certificate of analysis pursuant to section 5303 of this division;

§ 5307 (d) The packaging and labeling of the cannabis goods complies with Business and Professions Code Section 26120 and all applicable regulations within this division as well as California Code of Regulations, Title 3, Division 8 and Title 17, Division 1, Chapter 13, except cannabis goods are not required to be labeled or otherwise identified as medicinal products prior to retail sale unless the cannabis goods must be labeled as such pursuant to the requirements prescribed by the State Department of Public Health in regulation;

§ 5307 (e) The cannabis goods have not exceeded their expiration or sell-by date if one is provided;

§ 5307 (f) The weight or count of the cannabis batch comports with that in the track and trace system. A licensed distributor shall use scales as required by the Business and Professions Code; and

§ 5307 (g) All events prior to receipt of the certificate of analysis for regulatory compliance testing have been entered into the track and trace system.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26070, 26110 and 26120, Business and Professions Code.

§ 5307.1 Quality-Assurance Review for Labeling Cannabinoids and Terpenoids.

§ 5307.1 (a) For purposes of this division, any one cannabinoid, Total THC, and/or Total CBD claimed to be present on a label shall not be considered inaccurate if the difference in percentage on the certificate of analysis is plus or minus 10.0%.

§ 5307.1 (b) For purposes of this division, the terpenoid testing results on the label of any one terpenoid claimed to be present shall not be considered inaccurate if the difference in percentage on the certificate of analysis is plus or minus 10.0%.

§ 5307.1 (c) For purposes of this section, the difference in percent shall be calculated using the
following equation:

Difference in percent = │(laboratory measurement – label claim) │/ (label claim) x 100%

For purposes of this section, Total THC and Total CBD shall have the same meaning as defined
in Chapter 6 of this division.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26100 and 26110, Business and Professions Code.

§ 5307.2. Licensed Distributor to Licensed Distributor Transfers.

Cannabis goods, packaged as they will be sold at retail, that have undergone and passed regulatory compliance testing and have an accompanying certificate of analysis may be transferred to one or more licensed distributors. However, cannabis goods that have not been transported to retail within 12 months of the date on the certificate of analysis must be destroyed or retested by the licensed distributor in possession of the cannabis goods.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26070 and 26110, Business and Professions Code.

§ 5308. Insurance Requirements.

The following include, but are not limited to, additional grounds that constitute a basis for disciplinary action:

§ 5308 (a) An applicant for a distributor license shall provide the Bureau with a certificate of insurance that shows the types of insurance coverage and minimum amounts that have been secured as required by this section, and documentation establishing compliance with subsection (d) of this section.

§ 5308 (b) A distributor licensee shall at all times carry and maintain commercial general liability insurance in the aggregate in an amount no less than $2,000,000 and in an amount no less than $1,000,000 for each loss.

§ 5308 (c) A distributor licensee shall maintain the insurance required in subsection (b) of this section from an insurance company that is:

(1) A non-admitted insurer that meets the requirements of Insurance Code section 1765.1 or 1765.2, and the insurance is placed pursuant to Insurance Code section 1763 and through a surplus line broker licensed under Insurance Code section 1765;

(2) An insurer qualified to do business in California by the Secretary of State and authorized by the Insurance Commissioner to write the liability and property classes of insurance as defined by Insurance Code sections 102, 103, 107, 114, 108, and 120; or

(3) A registered risk retention group compliant with the California Risk Retention Act of 1991. (See California Insurance Code sections 125-140.)

§ 5308 (d) Admitted insurers and risk retention groups must show proof of capitalization in the amount of at least $10,000,000.

§ 5308 (e) A distributor licensee shall notify the Bureau in writing, by submitting the Notification and Request Form, BCC-LIC-027 (New 10/18), which is incorporated herein by reference, within 14 calendar days of a lapse in insurance in accordance with section 5023.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26051.5 and 26070, Business and Professions Code.

§ 5309. Inventory Accounting.

§ 5309 (a) A licensed distributor shall be able to account for all inventory and provide that information to the Bureau upon request.

§ 5309 (b) To account for inventory, a licensed distributor shall ensure all batches of cannabis goods are stored in accordance with section 5302 of this division and shall be able to provide the Bureau with the status of the batch as follows:

(1) The batch is being held in storage for another licensee;

(2) The batch is awaiting sampling for regulatory compliance testing;

(3) The batch has been sampled and is awaiting testing results;

(4) The batch has passed testing;

(5) The batch has failed testing and is awaiting approval for remediation;

(6) The batch has failed testing and is awaiting destruction; and

(7) The batch is being stored or held for any other lawful purpose under the Act or this
division.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26070 and 26160, Business and Professions Code.

§ 5310. Records

In addition to the records required by section 5037 of this division, a licensed distributor shall
maintain the following records:

§ 5310 (a) Records relating to branding, packaging and labeling;

§ 5310 (b) Inventory logs and records;

§ 5310 (c) Transportation bills of lading and shipping manifests for completed transports and for
cannabis goods in transit;

§ 5310 (d) Vehicle and trailer ownership records;

§ 5310 (e) Quality-assurance records;

§ 5310 (f) Records relating to destruction and disposal of cannabis goods;

§ 5310 (g) Laboratory-testing records;

§ 5310 (h) Warehouse receipts; and

§ 5310 (i) Records relating to tax payments collected and paid under Revenue and Taxation Code
sections 34011 and 34012.

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

§ 5311. Requirements for the Transportation of Cannabis Goods.

The following requirements apply when transporting cannabis goods between licensees or licensed premises:

§ 5311 (a) Transportation shall only be conducted by persons holding a distributor license under the Act, or employees of those persons. All vehicles and trailers used for transportation shall be owned or leased, in accordance with the Vehicle Code, by the licensee.

§ 5311 (b) Prior to transporting any cannabis goods, the licensed distributor shall have a completed sales invoice or receipt that meets the requirements of Business and Professions Code section 26161. The licensed distributor shall only transport cannabis goods listed on the sales invoice or receipt. The sales invoice or receipt may not be altered or changed once transport begins. 

§ 5311 (c) All vehicles transporting cannabis goods for hire shall be required to have a motor carrier permit pursuant to Chapter 2 (commencing with Section 34620) of Division 14.85 of the Vehicle Code.

§ 5811 (d) Transportation by means of aircraft, watercraft, drone, rail, human powered vehicle, or unmanned vehicle is prohibited.

§ 5311 (e) Cannabis goods shall only be transported inside of a vehicle or trailer and shall not be visible or identifiable from outside of the vehicle or trailer.

§ 5311 (f) Cannabis goods shall be locked in a fully enclosed box, container, or cage that is secured to the inside of the vehicle or trailer. No portion of the enclosed box, container, or cage shall be comprised of any part of the body of the vehicle or trailer. For the purposes of this section, the inside of the vehicle includes the trunk.

§ 5311 (g) While left unattended, vehicles and trailers shall be locked and secured.

§ 5311 (h) A licensed distributor shall not leave a vehicle or trailer containing cannabis goods unattended in a residential area or parked overnight in a residential area.

§ 5311 (i) At a minimum, a licensed distributor shall have a vehicle alarm system on all transport vehicles and trailers. Motion detectors, pressure switches, duress, panic, and hold-up alarms may also be used.

§ 5311 (j) Packages or containers holding cannabis goods shall not be tampered with, or opened, during transport.

§ 5311 (k) A licensed distributor transporting cannabis goods shall only travel between licensees shipping or receiving cannabis goods and its own licensed premises when engaged in the transportation of cannabis goods. The licensed distributor may transport multiple shipments of cannabis goods at once in accordance with applicable laws. A licensed distributor shall not deviate from the travel requirements described in this section, except for necessary rest, fuel, or vehicle repair stops.

§ 5311 (l) Under no circumstances may non-cannabis goods, except for cannabis accessories and licensees’ branded merchandise or promotional materials, be transported with cannabis goods.

§ 5311 (m) Vehicles and trailers transporting cannabis goods are subject to inspection by the Bureau at any licensed premises or during transport at any time. 

§ 5311 (n) Notwithstanding subsections (d)—(f) of this section, if it is not operationally feasible to transport cannabis goods inside of a vehicle or trailer because the licensed premises that the cannabis goods will be transported from and the licensed premises that will be receiving the cannabis goods are located within the same building or on the same parcel of land, the cannabis goods may be transported by foot, hand truck, fork lift, or other similar means. A shipping manifest that complies with this division is required when transporting cannabis goods pursuant to this subsection.

§ 5311 (0) Notwithstanding subsection (d) of this section, transportation of cannabis goods may be conducted via waterway to licensees located on Catalina Island. The provisions of this section and other sections regarding vehicle requirements also apply to vessels used to transport cannabis goods via waterway pursuant to this section.

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

§ 5312. Required Transport Vehicle Information.

§ 5312 (a) In addition to the information required in section 5314 of this division, any licensed distributor who will be or is transporting cannabis goods shall provide the following information to the Bureau:

(1) Proof that the licensed distributor is the registered owner under the Vehicle Code for each
vehicle and trailer used to transport cannabis goods;

(2) The year, make, model, license plate number, and numerical Vehicle Identification
Number (VIN) for each vehicle and trailer used to transport cannabis goods; and

(3) Proof of insurance for each vehicle and trailer used to transport cannabis goods.

§ 5312 (b) The licensed distributor shall provide the Bureau with the information required by this section in writing for any new vehicle or trailer that will be used to transport cannabis goods prior to using the vehicle or trailer to transport cannabis goods.

§ 5312 (c) The licensed distributor shall provide the Bureau with any changes to the information required by this section in writing within 30 calendar days, submitted on the Notification and Request Form, BCC-LIC-027 (New 10/18), which is incorporated herein by reference.

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

§ 5313. Transport Personnel Requirements.

§ 5313 (a) No person under the age of 21 years old shall be in a commercial vehicle or trailer transporting cannabis goods; and

§ 5313 (b) Only a licensee, an employee of the licensed distributor, or security personnel who meets the requirements of section 5045 of this division shall be in a vehicle while transporting cannabis goods.

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

§ 5314. Shipping Manifest.

§ 5314 (a) Prior to transporting cannabis goods, a licensed distributor shall generate a shipping manifest through the track and trace system for the following activities:

(1) Testing and sampling;

(2) Sale of cannabis goods to a licensee;

(3) Destruction or disposal of cannabis goods; and

(4) Any other activity, as required pursuant to this division, or by any other licensing authority.

§ 5314 (b) The licensed distributor shall transmit the shipping manifest to the Bureau and the licensee that will receive the cannabis goods prior to transporting the cannabis goods.

§ 5314 (c) The licensed distributor shall ensure and verify that the cannabis goods being taken into possession for transport at the originating licensed premises are as described and accurately reflected in the shipping manifest. For purposes of this section, the licensed distributor may verify that the cannabis goods are accurately reflected in the shipping manifest by confirming that the number of boxes of cannabis goods, type of cannabis goods, weight and/or units of cannabis goods matches the label on the boxes containing the cannabis goods.

(1) The licensed distributor shall not take into possession or transport:

(A) Any cannabis goods that are not on the shipping manifest; or

(B) Any cannabis goods that are less than or greater than the amount reflected on the shipping manifest.

(2) The licensed distributor is responsible for any discrepancies between the shipping
manifest and the cannabis goods in its possession during transport, and subject to any
enforcement or disciplinary action related to such discrepancy.

(3) A licensed distributor shall not void or change a shipping manifest after departing from
the originating licensed premises.

§ 5314 (d) A shipping manifest shall accompany every transport of cannabis goods.

§ 5314 (e) Notwithstanding subsection (a) of this section, if a transporting licensed distributor has not obtained access to the track and trace system, the licensed distributor shall complete the shipping manifest outside of the track and trace system and transmit it to the Bureau and the licensee receiving the shipment by electronic mail.

§ 5314 (f) If the transporting licensed distributor has access to the track and trace system and the licensee receiving the shipment has not obtained access to the track and trace system, the licensed distributor shall complete the shipping manifest in the track and trace system and transmit it to the Bureau. However, the licensed distributor shall send a copy to the licensee
receiving the shipment by electronic mail.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26067 and 26070, Business and Professions Code.

§ 5315. Distributor Transport Only License

§ 5315 (a) A licensed distributor transport only licensee may transport cannabis goods between licensees; however, they shall not transport any cannabis goods except for immature cannabis plants and seeds to a licensed retailer or licensed microbusiness authorized to engage in retail sales.

§ 5315 (b) A complete application for a distributor transport only license shall include all the information required in an application for a distributor license.

§ 5315 (c) The licensing fee for a distributor transport only license will be based in part upon whether the licensee intends to transport only cannabis goods that the licensee has cultivated or manufactured (self-distribution), or whether the licensee intends to transport cannabis goods cultivated or manufactured by other licensees. 

§ 5315 (d) A distributor transport only licensee shall comply with all of the requirements for a holder of a distributor license, except for those related to quality assurance and testing.

§ 5315 (e) A distributor transport only licensee shall not hold title to any cannabis goods unless the licensee also holds a state-issued cultivation, manufacturing, retailer, or microbusiness license.

§ 5315 (f) Holding a distributor transport only license shall not authorize a licensee to: 

(1) Engage in the delivery of cannabis goods as defined in Business and Professions Code section 26001(p);

(2) Engage in the wholesale, destruction, packaging, labeling, or storing of cannabis goods; or

(3) Arrange for the testing of cannabis goods by a testing laboratory

§ 5315 (g) Notwithstanding subsection (e) of this section, a distributor transport only licensee who is licensed to engage in self-distribution and whose licensed premises will be on the same property as their licensed cultivation or licensed manufacturing premises shall not be required to comply with the security provisions contained in Chapter 1, Article 5 of this division.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012 and 26070, Business and Professions Code.

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