SUBCHAPTER 1.

General Provisions and Definitions

Table of Contents

Article 1. Definitions

§40100. Definitions

In addition to the definitions in Business and Professions Code section 26001, the following definitions shall govern the construction of this chapter:

§ 40100 (a) “A-license” means a license issued for commercial cannabis activities involving cannabis and cannabis products that are intended for individuals 21 years of age and older and who do not possess a physician’s recommendation.

§ 40100 (b) “Act” means the Medicinal and Adult-Use Cannabis Regulation and Safety Act, codified at Business and Professions Code section 26000, et seq.

§ 40100 (c) “Adult-use Market” means the products intended for sale at a retailer or microbusiness to individuals 21 years of age and older and who do not possess a physician’s recommendation.

§ 40100 (d) “Adulterated” or “adulteration” has the meaning stated in section 26131 of the Act.

§ 40100 (e) “Allergen” means a major food allergen including any of the following:

(1) Milk, eggs, fish (e.g., bass, flounder, or cod), crustacean shellfish (e.g., crab, lobster, or shrimp), tree nuts (e.g., almonds, pecans, or walnuts), wheat, peanuts, and soybeans.

(2) A food ingredient that contains protein derived from a food specified in (1). “Allergen” does not include the following: Any highly refined oil derived from a food specified in (1) and any ingredient derived from such highly refined oil.

§ 40100 (f) “Applicant” means the owner that is applying on behalf of the commercial cannabis business for a license to manufacture cannabis products.

§ 40100 (g) “Batch” or “production batch” means either:

(1) An amount of cannabis concentrate or extract produced in one production cycle using the same extraction methods and standard operating procedures; or

(2) An amount of a type of cannabis product produced in one production cycle using the same formulation and standard operating procedures.

§ 40100 (h) “Bureau” means the Bureau of Cannabis Control in the Department of Consumer Affairs.

§ 40100 (i) “Cannabis concentrate” means cannabis that has undergone a process to concentrate one or more active cannabinoids, thereby increasing the product’s potency. For purposes of this chapter, “cannabis concentrate” includes, but is not limited to, the separated resinous trichomes of cannabis, tinctures, capsules, suppositories, extracts, vape cartridges, inhaled products (e.g., dab, shatter, and wax), and tablets as defined in subsection (rr).

§ 40100 (j) “Cannabis product” as used in this chapter means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients.

§ 40100 (k) “Cannabis product quality,” “quality cannabis product,” or “quality” means that the cannabis product consistently meets the established specifications for identity, cannabinoid concentration (as specified in Section 5724 of Title 16 of the California Code of Regulations), homogeneity, composition, and testing standards established by the Bureau in Sections 5718 to 5723, inclusive, of Title 16 of the California Code of Regulations, and has been manufactured, packaged, labeled, and held under conditions to prevent adulteration and misbranding.

§ 40100 (l) “Cannabis waste” means waste that contains cannabis or cannabis products but is not otherwise a hazardous waste as defined in Public Resources Code section 40141.

§ 40100 (m) “CBD” means the compound cannabidiol.

§ 40100 (n) “Commercial-grade, non-residential door lock” means a lock manufactured for commercial use.

§ 40100 (o) “Department” means the State Department of Public Health.

§ 40100 (p) “Distribution” means the procurement, sale, and transport of cannabis andcannabis products between licensees.

§ 40100 (q) “Edible cannabis product” means a cannabis product intended to be used orally, in whole or in part, for human consumption. For purposes of this chapter, “edible cannabis product” includes cannabis products that dissolve or disintegrate in the mouth, but does not include any product otherwise defined as “cannabis concentrate.”

§ 40100 (r) “Extraction” means a process by which cannabinoids are separated from cannabis plant material through chemical or physical means.

§ 40100 (s) “Finished product” means a cannabis product in its final form to be sold at a retail premises.

§ 40100 (t) “Harvest batch” means a specifically identified quantity of dried flower or trim, leaves, and other cannabis plant matter that is uniform in strain, harvested at the same time, and, if applicable, cultivated using the same pesticides and other agricultural chemicals, and harvested at the same time.

§ 40100 (u) “Informational panel” means any part of the cannabis product label that is not the primary panel and that contains required labeling information.

§ 40100 (v) “Infusion” means a process by which cannabis, cannabinoids, or cannabis concentrates are directly incorporated into a product formulation to produce a cannabis product.

§ 40100 (w) “Infused pre-roll” means a pre-roll into which cannabis concentrate (other than kief) or other ingredients have been incorporated.

§ 40100 (x) “Ingredient” means any substance that is used in the manufacture of a cannabis product and that is intended to be present in the product’s final form.

§ 40100 (y) “Kief” means the resinous trichomes of cannabis that have been separated from the cannabis plant.

§ 40100 (z) “Labeling” means any label or other written, printed, or graphic matter upon a cannabis product, upon its container or wrapper, or that accompanies any cannabis product.

§ 40100 (aa) “Limited-access area” means an area in which cannabis or cannabis products are stored or held and is only accessible to a licensee and authorized personnel.

§ 40100 (bb) “M-license” means a license issued for commercial cannabis activity involving medicinal cannabis.

§ 40100 (cc) “Manufacturer licensee” or “licensee” means the holder of a manufacturer license issued pursuant to the Act.

§ 40100 (dd) “Manufacture” means to compound, blend, extract, infuse, or otherwise make or prepare a cannabis product.

(1) The term “manufacture” includes the following processes:

(A) Extraction;

(B) Infusion;

(C) Packaging or repackaging of cannabis products; and

(D) Labeling or relabeling the packages of cannabis products.

(2) The term “manufacture” does not include the following:

(A) The repacking of cannabis products from a bulk shipping container by a distributor or retailer where the product’s original packaging and labeling is not otherwise altered;

(B) The preparation of pre-rolls by a licensed distributor in accordance with the requirements of the Bureau specified in Section 5303 of Division 42 of Title 16 of the California Code of Regulations;

(C) The collection of the resinous trichomes that are dislodged or sifted from the cannabis plant incident to cultivation activities by a licensed cultivator in accordance with the requirements of the California Department of Food and Agriculture specified in Article 4 of Chapter 1 of Division 8 of Title 3 of the California Code of Regulations;

(D) The processing of non-manufactured cannabis products, as defined in Section 8000 of Title 3 of the California Code of Regulations, by a licensed cultivator in accordance with the requirements of the California Department of Food and Agriculture specified in Article 4 of Chapter 1 of Division 8 of Title 3 of the California Code of Regulations; or

(E) The addition of cannabinoid content on the label of a package of cannabis or cannabis product by a distributor in accordance with Section 40409.

§ 40100 (ee) “Manufacturing” or “manufacturing operation” means all aspects of the extraction process, infusion process, and packaging and labeling processes, including processing, preparing, holding, and storing of cannabis products. Manufacturing also includes any processing, preparing, holding, or storing of components and ingredients.

§ 40100 (ff) “MCLS” means the Manufacturing Cannabis Licensing System, which is the online license application system available on the Department’s website (www.cdph.ca.gov).

§ 40100 (gg) “Nonvolatile solvent” means any solvent used in the extraction process that is not a volatile solvent. For purposes of this chapter, “nonvolatile solvents” include carbon dioxide and ethanol.

§ 40100 (hh) “Orally-consumed concentrate” means a cannabis concentrate that is intended to be consumed by mouth and is not otherwise an edible cannabis product. “Orallyconsumed concentrate” includes tinctures, capsules, and tablets that meet the definition of subsection (rr).

§ 40100 (ii) “Package” or “packaging” means any container or wrapper that may be used for enclosing or containing any cannabis product. The term “package” does not include any shipping container or outer wrapping used solely for the transportation of cannabis products in bulk quantity to another licensee or licensed premises.

§ 40100 (jj) “Personnel” means any worker engaged in the performance or supervision of operations at a manufacturing premises and includes full-time employees, part-time employees, temporary employees, contractors, and volunteers. For purposes of training requirements, “personnel” also includes owner-operators.

§ 40100 (kk) “Person” includes any individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular.

§ 40100 (ll) “Pre-roll” means any combination of the following rolled in paper: flower, shake, leaf, or kief.

§ 40100 (mm) “Premises” means the designated structure(s) and land specified in the application that is owned, leased, or otherwise held under the control of the applicant or licensee where the commercial cannabis activity (as defined in section 26001(k) of the Act) will be or is conducted. The premises shall be a contiguous area and shall only be occupied by one licensee.

§ 40100 (nn) “Primary panel” means the part of a cannabis product label that is most likely to be displayed, presented, shown, or examined under customary conditions of display for retail sale.

§ 40100 (oo) “Product Identity” or “identity of the product” means the generic, common, or usual name of the product by which it is most commonly known.

§ 40100 (pp) “Quarantine” means the storage or identification of a product, to prevent distribution or transfer of the product. 

§ 40100 (qq) “Serving” means the designated amount of cannabis product established by the manufacturer to constitute a single unit. 

§ 40100 (rr) “Tablet” means a solid preparation containing a single serving of THC or other cannabinoid that is intended to be swallowed whole, and that is not formulated to be chewable, dispersible, effervescent, orally disintegrating, used as a suspension, or consumed in a manner other than swallowed whole, and that does not contain any added natural or artificial flavor or sweetener. 

§ 40100 (ss) “THC” means the compound tetrahydrocannabinol. For purposes of this chapter, “THC” refers specifically to delta 9-tetrahydrocannabinol. 

§ 40100 (tt) “Topical cannabis product” means a cannabis product intended to be applied to the skin rather than ingested or inhaled.

§ 40100 (uu) “Track-and-trace system” means the program for reporting the movement of cannabis and cannabis products through the distribution chain established by the Department of Food and Agriculture in accordance with section 26067 of the Act.

§ 40100 (vv) “UID” means the unique identifier for use in the track-and-trace system established by the Department of Food and Agriculture in accordance with section 26069 of the Act.

§ 40100 (ww) “Universal symbol” means the symbol developed by the Department pursuant to section 26130(c)(7) of the Act to indicate a product contains cannabinoids.

§ 40100 (xx) “Volatile solvent” means any solvent that is or produces a flammable gas or vapor that, when present in the air in sufficient quantities, will create explosive or ignitable mixtures. Examples of volatile solvents include, but are not limited to, butane, hexane, and propane.

Authority: Sections 26012, 26013 and 26130, Business and Professions Code.
Reference: Sections 26001, 26120 and 26130, Business and Professions Code; Section 11018.1, Health and Safety Code.

§40101. Applicability

The department shall use the violation classes and applicable fine amounts as follows:

§ 40101 (a) Unless otherwise specified, the requirements of this chapter apply to all licensed manufacturers and to the manufacture of cannabis products for both the medicinal-use market and the adult-use market.

§ 40101 (b) The requirements for the production, packaging, and labeling of cannabis products in subchapters 3, 4, and 5 shall apply to licensed microbusinesses conducting manufacturing operations.

Authority: Sections 26012, 26013 and 26130, Business and Professions Code.
Reference: Sections 26050 and 26106, Business and Professions Code.

§40102. Owners and Financial Interest Holders.

§ 40102 (a) An owner shall mean any of the following:

(1) Any person that has an aggregate ownership interest, other than a security interest, lien, or encumbrance, in a commercial cannabis business of 20 percent or more;

(A) If the owner identified in subsection (a)(1) is an entity, then the chief executive
officer and members of the board of directors of the entity shall be considered owners.

(2) The chief executive officer of a commercial cannabis business;
(3) If a non-profit entity, each member of the board of directors;

(4) Any individual that will be participating in the direction, control, or management of the licensed commercial cannabis business. An owner who is an individual participating in the direction, control, or management of the commercial cannabis business includes any of the following:

(A) Each general partner of a commercial cannabis business that is organized as a partnership;

(B) Each non-member manager or managing member of a limited liability company for a commercial cannabis business that is organized as a limited liability company;

(C) Each officer or director of a commercial cannabis business that is organized as a corporation.

(5) The trustee(s) and all persons that have control of the trust and/or the commercial cannabis business that is held in trust.

§ 40102 (b) Financial interest holders, for purposes of section 26051.5(d) of the Act, are persons that hold an ownership interest of less than 20 percent in a commercial cannabis business, and are not otherwise specified as owners pursuant to subsection (a). Financial interest holders shall be disclosed on the application for licensure. A financial interest means an agreement to receive a portion of the profits of a commercial cannabis business, an investment into a commercial cannabis business, a loan provided to a commercial cannabis business, or any other equity interest in a commercial cannabis business.

§ 40102 (c) The following persons are not considered to be owners or financial interest holders:

(1) A bank or financial institution whose interest constitutes a loan;

(2) Persons whose only ownership interest in the commercial cannabis business is through an interest in a diversified mutual fund, blind trust, or similar instrument;

(3) Persons whose only financial interest is a security interest, lien, or encumbrance on the property that will be used by the commercial cannabis business; and

(4) Persons who hold a share of stock that is less than 5 percent of the total shares in a publicly traded company

Authority: Sections 26012 and 26013, Business and Professions Code. 
Reference: Sections 26001 and 26051.5, Business and Professions Code.

§40105. Premises Diagram.

§ 40105 (a) The premises diagram required pursuant to section 26051.5(c) of the Act shall meet the following requirements:

(1) The diagram shall be specific enough to enable ready determination of the bounds of the property and the proposed premises to be licensed;

(2) The diagram shall be to scale;

(3) If the proposed premises consists of only a portion of a property, the diagram shall be labeled to indicate which part of the property is the proposed premises and identify what the remaining property is used for.

§ 40105 (b) The premises diagram shall include:

(1) All boundaries, dimensions, entrances and exits, interior partitions, walls, rooms, windows, and doorways.

(2) The areas in which all commercial cannabis activities will be conducted. Commercial cannabis activities that shall be identified on the diagram include the following, as applicable to the business operations: infusion activities, extraction activities, packaging activities, labeling activities, and transportation activities such as loading and unloading of cannabis and cannabis products.

(3) The limited-access areas, areas used for video surveillance monitoring and surveillance system storage devices, and all security camera locations.

(4) Cannabis waste disposal areas.

§ 40105 (c) If the proposed premises consists of only a portion of a property that will contain two or more licensed premises, the diagram shall clearly show any entrances and walls under the exclusive control of the applicant or licensee. The diagram shall also show all proposed common or shared areas of the property, including entryways, lobbies, bathrooms, hallways, and breakrooms.

§ 40105 (d) The diagram shall be used by the Department to determine whether the premises meets the requirements of the Act and this chapter.

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

Article 2. General Provisions

§40115. License Required.

§ 40115 (a) Every person who manufactures cannabis products shall obtain and maintain a valid manufacturer license from the Department for each separate premises at which manufacturing operations will be conducted.
§ 40115 (b) No person shall manufacture cannabis products without a valid license from the Department.

§ 40115 (c) Licenses shall not be transferrable.

Authority: Sections 26012, 26013 and 26130, Business and Professions Code.
Reference: Section 26053, Business and Professions Code.

§40116. Personnel Prohibited from Holding Licenses.

§ 40116 (a) A license authorized by the Act and issued by the Department may not be held by, or issued to, any person holding office in, or employed by, any agency of the State of California or any of its political subdivisions when the duties of such person have to do with the enforcement of the Act or the penal provisions of law of this State prohibiting or regulating the sale, use, possession, transportation, distribution, testing, manufacturing, or cultivation of cannabis or cannabis products.

§ 40116 (b) This section applies to, but is not limited to, any person employed in the State of California Department of Justice as a peace officer, in any district attorney’s office, in any city or county attorney’s office, in any sheriff’s office, or in any local police department.

§ 40116 (c) All persons listed in subsection (a) or (b) may not have any ownership interest, directly or indirectly, in any business to be operated or conducted under a cannabis license.

§ 40116 (d) This section does not apply to any person who holds a license in the capacity of executor, administrator, or guardian.

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

§40118. Manufacturing License Types.

The following license types are available from the Department:

§ 40118 (a) “Type 7,” for extractions using volatile solvents as defined by Section 40100(xx). A Type 7 licensee may also:

(1) Conduct extractions using nonvolatile solvents or mechanical methods on the licensed premises, provided that the extraction process is noted on the application and the relevant information pursuant to Section 40131 is provided to the Department;

(2) Conduct infusion operations on the licensed premises, provided the infusion operations and product types are noted on the application and the relevant information pursuant to Section 40131 is provided to the Department;

(3) Conduct packaging and labeling of cannabis products on the licensed premises; and

(4) Register and operate the licensed premises as a shared-use facility in
accordance with Article 6 (commencing with Section 40190) of Subchapter 2.

§ 40118 (b) “Type 6,” for extractions using mechanical methods or nonvolatile solvents as defined by Section 40100(gg). A Type 6 licensee may also:

(1) Conduct infusion operations on the licensed premises, provided the infusion operations and product types are noted on the application and the relevant information pursuant to Section 40131 is provided to the Department;

(2) Conduct packaging and labeling of cannabis products on the licensed premises; and

(3) Register and operate the licensed premises as a shared-use facility in accordance with Article 6 (commencing with Section 40190) of Subchapter 2.

§ 40118 (c) “Type N,” for manufacturers that produce cannabis products other than extracts or concentrates that are produced through extraction. A Type N licensee may also:

(1) Conduct packaging and labeling of cannabis products on the licensed premises; and

(2) Register and operate the licensed premises as a shared-use facility in accordance with Article 6 (commencing with Section 40190) of Subchapter 2.

§ 40118 (d) “Type P,” for manufacturers that only package or repackage cannabis products or label or relabel cannabis product containers or wrappers.

§ 40118 (e) “Type S,” for manufacturers that conduct commercial cannabis manufacturing activities in accordance with Article 6 (commencing with Section 40190) of Subchapter 2 at a registered shared-use facility.

Authority: Sections 26012, 26013 and 26130, Business and Professions Code.
Reference: Sections 26012, 26050 and 26130, Business and Professions Code.

§40120. Additional Activities.

In addition to the activities specified in Section 40118, a licensee may also roll and package pre-rolls and package dried cannabis flower.

Authority: Sections 26012, 26013 and 26130, Business and Professions Code.
Reference: Sections 26012 and 26130, Business and Professions Code.

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