Chapter 4

APPLICABLE TO ALL LICENSED CANNABIS MICROBUSINESSES IN CALIFORNIA

Chapter 4 (Microbusiness) of the Bureau of Cannabis Control ("Bureau" or "BCC") Text of Regulations covers regulations specific to licensed cannabis microbusinesses in California.

Chapter 4. MICROBUSINESS | Table of Contents

§ 5500. Microbusiness.

§ 5500 (a) In order to hold a microbusiness license, a licensee must engage in at least three (3) of the following commercial cannabis activities: cultivation, manufacturing, distribution, and retail sale. License types created by the California Department of Food and Agriculture or the State Department of Public Health in regulation shall not be considered qualifying
commercial cannabis activities for purposes of obtaining a microbusiness license, except for the Type N manufacturing license.

§ 5500 (b) An applicant for a microbusiness license shall indicate on the application for licensure which commercial cannabis activities the applicant intends to engage in.

§ 5500 (c) An application for a microbusiness license shall include:

(1) For an application indicating that the applicant intends to engage in cultivation under the microbusiness license, all the required information under sections 5002, 5501, 5502 and 5503 of this division.

(2) For an application indicating that the applicant intends to engage in manufacturing under the
microbusiness license, all the required information under sections 5002, and 5506 of this
division.

(3) For an application indicating that the applicant intends to engage in distribution under the
microbusiness license, all the required information for an application seeking a distributor
license.

(4) For an application indicating that the applicant intends to engage in distribution,
transport- only under the microbusiness license, all the required information for an application seeking a distributor, transport-only license.

(5) For an application indicating that the applicant intends to engage in retail sale under the microbusiness license, all the required information for an application seeking a retailer license.

(6) For an application indicating that the applicant intends to engage in non-storefront retail sale under the microbusiness license, all the required information for an application seeking a non- storefront retailer license.

§ 5500 (d) All cultivation, manufacturing, distribution, and retail activities performed by a licensee
under a microbusiness license shall occur on the same licensed premises.

§ 5500 (e) A holder of a microbusiness license shall comply with the following:

(1) A holder of a microbusiness license engaged in cultivation shall comply with all the
rules and requirements applicable to the cultivation license type suitable for the cultivation
activities of the licensee.
(2) A holder of a microbusiness license engaged in manufacturing shall comply with all the
rules and requirements applicable to a Manufacturer 1 license in Division 1 of Title 17 of the
California Code of Regulations.
(3) A holder of a microbusiness license engaged in distribution shall comply with all the rules
and requirements applicable to a distributor license in this division.
(4) A holder of a microbusiness license engaged in retail sale shall comply with all the rules
and requirements applicable to a retailer license, or a non-storefront retailer license if retail
sales are conducted by delivery only, in this division.

§ 5500 (f) A holder of a microbusiness license may only engage in the commercial cannabis activity requested in the license application and approved by the Bureau at the time the license is issued. If the holder of a microbusiness license wants to engage in an additional commercial cannabis activity after the license is issued, the licensee shall submit a request for a modification of the licensed premises pursuant to section 5027 of this division.

§ 5500 (g) A holder of a microbusiness license shall comply with all the security rules and requirements applicable to the corresponding license type suitable for the activities of the licensee.

§ 5500 (h) Areas of the licensed premises for manufacturing and cultivation shall be separated from the distribution and retail areas by a wall and all doors between the areas shall remain closed when not in use.

§ 5500 (i) A suspension or revocation of a microbusiness licensee shall affect all commercial cannabis activities allowed pursuant to that license.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012, 26050, 26051.5 and 26070, Business and Professions Code.

§ 5501. Microbusiness Applications Including Cultivation Activities.

In addition to the information required in section 5002 of this division, an application for a microbusiness license to engage in cultivation shall include the following:

§ 5501 (a) Evidence of enrollment with the applicable Regional Water Quality Control Board or State Water Resources Control Board for water quality protection programs or written verification from the appropriate Board that enrollment is not necessary.

§ 5501 (b) Evidence that the applicant has conducted a hazardous materials record search of the EnviroStor database for the proposed premises. If hazardous sites were encountered, the applicant shall provide documentation of protocols implemented to protect employee health and safety. 

§ 5501 (c) For indoor and mixed-light cultivation, identification of all power sources for cultivation activities, including, but not limited to: illumination, heating, cooling, and ventilation.

§ 5501 (d) A premises diagram pursuant to section 5006 of this division that shall also include:

(1) All roads and water crossings on the property.

(2) If the applicant is proposing to use a diversion from a waterbody, groundwater well, or rain catchment system as a water source for cultivation, the following locations on the property diagram with locations also provided as coordinates in either latitude and longitude or the California Coordinate System:

(A) Sources of water used, including the location of waterbody diversion(s), pump location(s), and distribution system; and

(B) Location, type, and capacity of each storage unit to be used for cultivation.

§ 5501 (e) A proposed cultivation plan pursuant to section 5502 of this division.

§ 5501 (f) Identification of all water sources used for cultivation activities and the applicable supplemental information for each source as required by section 5503 of this division:

(1) All roads and water crossings on the property.

(2) A groundwater well;

(3) A rainwater catchment system; or

(4) A diversion from a surface waterbody or an underground stream flowing in a known and definite channel.

§ 5501 (g) A copy of any final lake or streambed alteration agreement issued by the California Department of Fish and Wildlife, pursuant to Fish and Game Code sections 1602 and 1617, or written verification from the California Department of Fish and Wildlife that a lake and streambed alteration agreement is not required.

§ 5501 (h) An attestation that the applicant entity is an “agricultural employer” as defined by the Alatorre-Zenovich-Dunlap-Berman Agricultural Labor Relations Act of 1975; Division 2, Part 3.5 (commencing with Section 1140) of the Labor Code.

§ 5501 (i) An attestation that the local fire department has been notified of the cultivation site if the applicant entity is an indoor license type.

§ 5501 (j) An acknowledgement that the applicant understands that the information provided in the application that is relevant to the cultivation operation may be shared with the Department of Food and Agriculture for purposes of evaluating the applicant’s qualifications for licensure. If the Department of Food and Agriculture corresponds directly with the applicant on matters related to the application, the applicant shall agree to cooperate. The applicant shall further agree that the Department of Food and Agriculture may conduct inspections on the areas of the premises related to their respective oversight authority.

§ 5501 (k) If applicable, a detailed description of any fines or penalties for cultivation or production of a controlled substance on public or private land pursuant to Fish and Game Code section 12025 or 12025.1 against the applicant or a business entity in which the applicant was an owner or officer within 3 years preceding the date of application.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012, 26050, 26051.5 and 26070, Business and Professions Code.

§ 5502. Cultivation Plan Requirements.

A cultivation plan shall include all of the following:

§ 5502 (a) A detailed premises diagram showing all cultivation activity areas, boundaries, and dimensions
in feet. The total area of the following cultivation activity areas shall be less than 10,000 square
feet as provided in Business and Professions Code section 26070.

(1) Canopy area(s) (which shall contain mature plants, at any point in time), including aggregate square footage if the canopy areas are noncontiguous.

(2) Area(s) outside of the canopy where only immature plants shall be maintained, if applicable.

(3) Designated pesticide and other agricultural chemical storage area(s).

(4) Designated processing area(s) if the licensee will process on site.

(5) Designated packaging area(s) if the licensee will package products on site.

(6) Designated composting area(s) if the licensee will compost plant or cannabis waste on site.

(7) Designated secured area(s) for cannabis waste if different than subsection (a)(6) of this section.

(8) Designated area(s) for harvested cannabis storage.

(9) Designated research and development area(s) which may contain mature plants for nursery only.

(10) Designated seed production area(s) which may contain mature plants for nursery only.

§ 5502 (b) For purposes of subsection(a)(1) in this section, canopy shall be calculated in square feet and measured using clearly identifiable boundaries of all areas(s) that will contain mature plants at any point in time, including all of the space(s) within the boundaries. Canopy may be noncontiguous, but each unique area included in the total canopy calculation shall be separated by an identifiable boundary which include, but are not limited to: interior walls, shelves, greenhouse walls, hoop house walls, garden benches, hedgerows, fencing, garden beds, or garden plots. If mature plants are being cultivated using a shelving system, the surface area of each level shall be included in the total canopy calculation. Immature plants for cultivation activities of a microbusiness shall have the same definition as defined by the California Department of Food and Agriculture in regulation.

§ 5502 (c) For indoor and mixed-light cultivation, a lighting diagram with the following information shall be included:

(1) Location of all lights in the canopy area(s); and

(2) Maximum wattage, or wattage equivalent, of each light. 

§ 5502 (d) A pest management plan which shall include, but not be limited to, the following:

(1) Product name and active ingredient(s) of all pesticides to be applied to cannabis during any stage of plant growth; and

(2) Integrated pest management protocols including chemical, biological, and cultural methods
the applicant anticipates using to control or prevent the introduction of pests on the cultivation
site.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26050, 26051.5 and 26070, Business and Professions Code.

§ 5503. Supplemental Water Source Information.

The following information shall be provided for each water source identified by the applicant:

§ 5503 (a) Retail water supply sources: 

(1) If the water source is a retail water supplier, as defined in Water Code section 13575,
identify the retail water supplier.

(2) If the water source is a small retail water supplier, such as a delivery service, and is
subject to Business and Professions Code section 26060.1(a)(1)(B):

(A) If the retail water supplier contract is for delivery or pickup of water from a surface water
body or an underground stream flowing in a known and definite channel, provide all of the
following:

(i) The name of the retail water supplier under the contract;

(ii) The geographic location coordinates in either latitude and longitude or the California Coordinate System of any point of diversion used by the retail water supplier to divert water delivered to the applicant under the contract;

(iii) The authorized place of use of any water right used by the retail water supplier to divert water delivered to the applicant under the contract; and

(iv) The maximum amount of water delivered to the applicant for cannabis cultivation in
any year.

(B) If the retail water supplier contract is for delivery or pickup of water from a
groundwater well, provide all of the following:

(i) The name of the retail water supplier;

(ii) The geographic location coordinates for any groundwater well used to supply water delivered to the applicant, in either latitude and longitude or the California Coordinate System;

(iii) The maximum amount of water delivered to the applicant for cannabis cultivation in any year; and

(iv) A copy of the well log filed with the Department of Water Resources pursuant to Water Code section 13751 for each percolating groundwater well used to divert water delivered to the applicant. If no well log is available, the applicant shall provide evidence from the Department of Water Resources indicating that the Department of Water Resources does not have a record of the well log. When no well log is available, the State Water Resources Control Board may request additional information about the well.

§ 5503 (b) If the water source is a groundwater well:

(1) The groundwater well’s geographic location coordinates in either latitude and longitude or the California Coordinate System; and

(2) A copy of the well log filed with the Department of Water Resources pursuant to Water Code section 13751. If no well log is available, the applicant shall provide evidence from the Department of Water Resources indicating that the Department of Water Resources does not have a record of the well log. If no well log is available, the State Water Resources Control Board may request additional information about the well.

§ 5503 (c) If the water source is a rainwater catchment system:

(1) The total square footage of the catchment footprint area(s);

(2) The total storage capacity, in gallons, of the catchment system(s); and

(3) A detailed description of the type, nature, and location of each catchment surface. Examples of catchment surfaces include a rooftop and greenhouse.

§ 5503 (d) If the water source is a diversion from a waterbody, provide any applicable statement, application, permit, license, or small irrigation use registration identification number(s), and either:

(1) A copy of any applicable registrations, permits, or licenses or proof of a pending application, issued under Part 2 (commencing with Section 1200) of Division 2 of the Water Code as evidence of approval of a water diversion by the State Water Resources Control Board;

(2) A copy of any statements of diversion and use filed with the State Water Resources Control Board before October 31, 2017, detailing the water diversion and use; or

(3) A copy of documentation submitted to the State Water Resources Control Board before October 31, 2017, demonstrating that the diversion is authorized under a riparian right and that no diversion occurred in any calendar year between January 1, 2010, and January 1, 2017.

(4) If the applicant has claimed an exception from the requirement to file a statement of diversion and use pursuant to Water Code section 5101, the applicant shall provide a copy of the documentation submitted to the State Water Resources Control Board before January 1, 2019, demonstrating that the diversion is subject to Water Code section 5101, subdivision (a), (c), (d), or (e).

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26050, 26051.5 and 26070, Business and Professions Code; and Section 13149, Water Code.

§ 5504. License Issuance in an Impacted Watershed.

If the State Water Resources Control Board or the Department of Fish and Wildlife finds, based on substantial evidence, that a licensed microbusiness’ cannabis cultivation is causing significant adverse impacts on the environment in a watershed or other geographic area, the Bureau shall not issue new microbusiness licenses that include cultivation activities or increase the total number of plant identifiers within that watershed or area.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26011.5, 26055 and 26070, Business and Professions Code.

§ 5505. Cultivation Records for Licensees Engaging in Cultivation Activities.

In addition to the records required by section 5037 of this division, a licensed microbusiness engaging in cultivation activities shall maintain the following records:

§ 5505 (a) Cultivation plan(s);

§ 5505 (b) All records evidencing compliance with the environmental protection measures required in sections 5501, 5502, 5503 and 5504 of this division; and

§ 5505 (c) All unique identifiers (UID) assigned to product in inventory and all unassigned UIDs. UIDs associated with product that has been retired from the track and trace system must be retained for six (6) months after the date the tags were retired.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26069, 26160, and 26161, Business and Professions Code.

§ 5506 Microbusiness Applications Including Manufacturing Activities.

In addition to the information required in section 5002 of this division, an application for a microbusiness license that engages or will engage in manufacturing, shall include the following:

§ 5506 (a) The type of activity conducted at the premises (extraction, infusion, packaging, and/or labeling).

§ 5506 (b) The types of products that will be manufactured, packaged, or labeled.

§ 5506 (c) The name, title, and phone number of the on-site individual who manages the operation of the premises.

§ 5506 (d) The name, title, and phone number of an alternate contact person for the premises.

§ 5506 (e) The number of employees at the premises.

§ 5506 (f) The following information:

(1) A description of inventory control procedures sufficient to demonstrate how the applicant will comply with the requirements of section 40282 of Title 17 of the California Code of Regulations, or a copy of the standard operating procedure addressing inventory control;

(2) A copy of the product quality plan that meets the requirements of section 40253 of Title 17 of the California Code of Regulations; and

(3) A description of security procedures sufficient to demonstrate how the applicant will comply with the requirements of section 40200 of Title 17 of the California Code of Regulations, or a copy of the standard operating procedure addressing security procedures.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012, 26050, 26051.5, 26055 and 26070, Business and Professions Code.

§ 5506.1 Microbusiness Failed Manufactured Cannabis Product Batches.

A microbusiness licensee that engages or will engage in manufacturing shall handle failed manufactured cannabis product batches in accordance with the following:

§ 5506.1 (a) A finished manufactured cannabis product batch that fails any laboratory testing requirement established by the Bureau pursuant to Business and Professions Code section 26100 shall be destroyed unless a corrective action plan for remediation or reprocessing is approved by the Bureau pursuant to subsection (d) of this section.

§ 5506.1 (c) Edible cannabis products that fail laboratory testing requirements shall not be remediated or reprocessed and shall be destroyed. If any edible cannabis product that has failed laboratory testing is remediated, reprocessed, or otherwise mixed with another batch of cannabis product, such action shall render the final cannabis product adulterated, as defined in Business and Professions Code section 26131, regardless of the defect level of the final cannabis product.

§ 5506.1 (d) A manufactured cannabis product batch or a harvest batch that fails laboratory testing or quality assurance review shall not be remediated or reprocessed unless the Bureau has approved a corrective action plan submitted by the microbusiness licensee. The corrective action plan shall include, at minimum, a description of how the product or harvest batch will be remediated so that the product or harvest batch, or any product produced therefrom, will meet all laboratory testing and quality assurance requirements. Corrective action plans will be reviewed by the Bureau on a case-by-case basis.

§ 5506.1 (e) All remediation of harvest or manufactured cannabis product batches shall be documented in the microbusiness’ manufacturing records. Remediated products, harvest batches, or products produced therefrom shall be tested and undergo quality assurance review in accordance with the requirements established by the Bureau in Chapter 2 of this division.

§ 5506.1 (e) Notwithstanding subsection (c) of this section, if the edible cannabis products are orally- dissolving products, as defined in section 5700 of this division, and fail laboratory testing because the per-package limit of THC for adult-use products has been exceeded, the orally- dissolving products may be remediated by repackaging the orally-dissolving products as medicinal products in accordance with the following:

(1) A corrective action plan pursuant to subsection (d) of this section shall be submitted to and approved by the Bureau;

(2) The orally-dissolving edible cannabis products batch is returned to the licensed microbusiness that packaged the products;

(3) The orally-dissolving edible cannabis products are not altered in any way; and

(4) The orally-dissolving edible cannabis product is labeled to accurately state the contents.

Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012, 26050 and 26070, Business and Professions Code.

§ 5507 Microbusiness Records for Licensees Engaging in Manufacturing Activities.

In addition to the records required by section 5037 of this division, a licensed microbusiness engaging in manufacturing activities shall maintain all records required to be maintained by manufacturers under Chapter 13, Division 1 of Title 17 of the California Code of Regulations.

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

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