Existing law, the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities. Existing law gives the Department of Cannabis Control the power, duty, purpose, responsibility, and jurisdiction to regulate commercial cannabis activity in the state. Existing law authorizes the department to take disciplinary actions against a licensee, as provided. Existing law requires the department to prepare and disseminate, as specified, an annual report relating to the departments activities, including, among other things, the amount of funds allocated and spent by the department for cannabis licensing, enforcement, and administration, and the number of state licenses issued, renewed, denied, suspended, and revoked.

This bill, the Cannabis Enforcement Accountability and Public Health Prioritization Act of 2026, would require the department department, beginning January 1, 2028, to prioritize its enforcement of MAUCRSA in a manner consistent with an enforcement prioritization policy, as defined, based on specified categories, that are listed from highest to lowest priority, based on conduct or conditions, as specified, that create a risk of harm, as described. The bill would define risk of harm as the likelihood of, among other things, interference with enforcement of state law. The Beginning January 1, 2028, the bill would require the department to adopt and publish an enforcement prioritization policy, as specified, and would require the department to include in the above-described annual report the number, geographic distribution, and, as applicable, dollar amount of specified enforcement activities in relation to the risk-based enforcement framework, as provided.

Existing law, the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities. Existing law gives the Department of Cannabis Control the power, duty, purpose, responsibility, and jurisdiction to regulate commercial cannabis activity in the state. Existing law authorizes the department to take disciplinary actions against a licensee, as provided. Existing law requires the department to prepare and disseminate, as specified, an annual report relating to the departments activities, including, among other things, the amount of funds allocated and spent by the department for cannabis licensing, enforcement, and administration, and the number of state licenses issued, renewed, denied, suspended, and revoked.

This bill, the Cannabis Enforcement Accountability and Public Health Prioritization Act of 2026, would require the department to prioritize its enforcement of MAUCRSA in a manner consistent with an enforcement prioritization policy, as defined, based on specified categories, that are listed from highest to lowest risk of harm. priority, based on conduct or conditions, as specified, that create a risk of harm, as described. The bill would define risk of harm as conduct, practices, or conditions that are reasonably expected to, the likelihood of, among other things, interfere interference with enforcement of state law. The bill would require the department to adopt and publish an enforcement prioritization policy, as specified, and would require the department to include in the above-described annual report the number, geographic distribution, and, as applicable, dollar amount of specified enforcement activities in relation to the risk-based enforcement framework, as provided.

Existing law, the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities. Existing law gives the Department of Cannabis Control the power, duty, purpose, responsibility, and jurisdiction to regulate commercial cannabis activity in the state. Existing law authorizes the department to take disciplinary actions against a licensee, as provided. Existing law requires the department to prepare and disseminate, as specified, an annual report relating to the departments activities, including, among other things, the amount of funds allocated and spent by the department for cannabis licensing, enforcement, and administration, and the number of state licenses issued, renewed, denied, suspended, and revoked.

This bill, the Cannabis Enforcement Accountability and Public Health Prioritization Act of 2026, would require the department to prioritize its enforcement of MAUCRSA in a manner consistent with a risk-based an enforcement framework that focuses on material threats while applying less intensive and less punitive measures on minor technical or administrative violations by licensees, as specified. prioritization policy, as defined, based on specified categories, that are listed from highest to lowest risk of harm. The bill would define material threats risk of harm as conduct, practices, or conditions that create a reasonably foreseeable risk of significant harm to public health, public safety, environmental protection, workplace safety, or the integrity of the licensed market, as described. The bill would prohibit minor technical or administrative violations that do not constitute a material threat from being the sole basis for suspension or revocation of a license, except as specified. are reasonably expected to, among other things, interfere with enforcement of state law. The bill would require the department to adopt and publish an enforcement prioritization policy, as specified, and would require the department to include in the above-described annual report the number, geographic distribution, and, as applicable, dollar amount of specified enforcement activities in relation to the risk-based enforcement framework, as provided.

Existing law, the Medicinal and Adult-Use Cannabis Regulation and Safety Act, Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities. Existing law gives the Department of Cannabis Control the power, duty, purpose, responsibility, and jurisdiction to regulate commercial cannabis activity in the state. Existing law specifies it does not supersede or limit the authority of a local jurisdiction to adopt and enforce local ordinances to regulate commercial cannabis businesses within that local jurisdiction, as described. Existing law authorizes the department to take disciplinary actions against a licensee, as provided. Existing law requires the department to prepare and disseminate, as specified, an annual report relating to the departments activities, including, among other things, the amount of funds allocated and spent by the department for cannabis licensing, enforcement, and administration, and the number of state licenses issued, renewed, denied, suspended, and revoked.

This bill would make nonsubstantive changes to those provisions. bill, the Cannabis Enforcement Accountability and Public Health Prioritization Act of 2026, would require the department to prioritize its enforcement of MAUCRSA in a manner consistent with a risk-based enforcement framework that focuses on material threats while applying less intensive and less punitive measures on minor technical or administrative violations by licensees, as specified. The bill would define material threats as conduct, practices, or conditions that create a reasonably foreseeable risk of significant harm to public health, public safety, environmental protection, workplace safety, or the integrity of the licensed market, as described. The bill would prohibit minor technical or administrative violations that do not constitute a material threat from being the sole basis for suspension or revocation of a license, except as specified. The bill would require the department to adopt and publish an enforcement prioritization policy, as specified, and would require the department to include in the above-described annual report the number, geographic distribution, and, as applicable, dollar amount of specified enforcement activities in relation to the risk-based enforcement framework, as provided.

Existing law, the Medicinal and Adult-Use Cannabis Regulation and Safety Act, among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities. Existing law gives the Department of Cannabis Control the power, duty, purpose, responsibility, and jurisdiction to regulate commercial cannabis activity in the state. Existing law specifies it does not supersede or limit the authority of a local jurisdiction to adopt and enforce local ordinances to regulate commercial cannabis businesses within that local jurisdiction, as described.

This bill would make nonsubstantive changes to those provisions.

SENATE COMMITTEE ON

Senator Sabrina Cervantes, Chair

2025 - 2026 Regular Session

AB 2537 (Chen) - Cannabis Enforcement Accountability and Public Health Prioritization Act of 2026

Bill Summary:

AB 2537 requires the Department of Cannabis Control (DCC) to adopt and publish an enforcement prioritization policy; prioritize regulatory oversight, investigations, inspections, and enforcement and disciplinary actions in a manner consistent with this policy, as specified; and include additional enforcement data in its annual report to the Legislature.

Fiscal Impact:

DCC estimates total costs of $1.4 million (Cannabis Control Fund). This estimate includes:

• Approximately $800,000 for legal staff to develop the required enforcement prioritization framework, and to revise existing inspection and investigation procedures and disciplinary guidance.
• Approximately $600,000 for IT system modifications and data collection enhancements to integrate data across existing enforcement systems, as well as ongoing system maintenance.
• Unknown, potentially significant additional legal workload to address an expected increase in administrative appeals and litigation challenging the department's categorization of violations or its application of the prioritization framework. DCC estimates that up to three additional Attorney III positions would be required to address this workload.

Background:

Established in 2022, the DCC’s recommended uniform disciplinary guidelines aim to provide statewide consistency for formal discipline (revocation, suspension, probation, or fines). The guidelines do not apply to standard administrative citations and fines. When determining penalties, the DCC evaluates the following elements:

• Nature and Gravity: The severity and type of the act, offense, or crime and any mitigating evidence.
• Harm: Actual or potential harm to the public or consumers.
• History: Prior disciplinary/administrative record and overall criminal history.
• Current Violations and Timing: The number and variety of active violations, and time elapsed since the act(s) or offense(s) occurred.
• Rehabilitation and Compliance: Evidence of fitness for licensure (under Penal Code section 4852.01) and compliance with court-ordered sentences or probation.

The guidelines recommend penalties based on the severity of the violation, which are categorized in Tier 1-Tier 3:

• Tier 1 violations encompass acts that are potentially harmful to the public or consumers. There are over 40 specific violations within this category, including unauthorized inventory storage, failure to properly display name tags, advertising and marketing infractions, improper age verification, and the unauthorized use of pesticides on cannabis plants. For these offenses, the recommended minimum penalty is a stayed revocation, a 5- to 15-day suspension, a fine, or a combination of a suspension and fine. The maximum penalty for a Tier 1 violation is full license revocation.
• Tier 2 violations are reserved for actions that carry a serious potential for harm or demonstrate a greater disregard for public safety. This category also contains over 40 violations, ranging from holding an interest in a licensed testing laboratory or subletting a retail premises to track-and-trace failures, inventory accounting discrepancies, poor laboratory practices, and prohibited attire or conduct. The recommended penalties for Tier 2 mirror those of Tier 1: a minimum of a stayed revocation, a 5- to 15-day suspension, a fine, or a combination thereof, with a maximum penalty of revocation.
• Tier 3 encompasses the most severe infractions, specifically targeting licensees who knowingly or willfully violate commercial cannabis laws or commit fraudulent business acts. There are fewer than 30 violations in this category, which include the retail sale of untested cannabis goods, conducting business with non-licensees, making false statements or omissions on an application, failing to pay taxes, and violating an embargo. The recommended minimum penalty for a Tier 3 violation is a stayed revocation, a 45-day suspension, a fine, or a combination of a suspension and fine, while the maximum penalty is a suspension.

Violations specific to cultivators are handled separately and divided into three distinct categories:

• Minor: Violations unlikely to pose serious health or environmental risks.
• Moderate: Violations that undermine law enforcement, are likely to cause public or environmental harm, or repeat a minor violation within a designated timeframe.
• Serious: Violations that significantly interfere with enforcement, involve major deceptive business practices, carry high potential for public or environmental harm, or repeat a moderate violation within a specified timeframe.

Proposed Law:

• Establishes the Cannabis Enforcement Accountability and Public Health Prioritization Act of 2026.
• Beginning January 1, 2028, requires the department to:
  • Prioritize regulatory oversight, investigations, inspections, and enforcement and disciplinary actions in a manner consistent with an enforcement prioritization policy based on the following categories, which are listed in order from highest to lowest priority: serious violations, moderate violations, and minor violations.
  • Adopt and publish an enforcement prioritization policy to implement this section that does, at a minimum, all of the following:
    • Ensures personnel and resources are allocated in a manner consistent with the priority of violations, as specified.
    • Establishes the enforcement and disciplinary actions for each category of violation.
    • Provides for documentation of enforcement actions involving all violations.
• Provides that the Act does not limit the department’s enforcement authority and applicable regulations, and that the department’s disciplinary framework or guidelines for disciplinary action shall not conflict with the Act.
• Beginning March 1, 2028, and by March 1^st annually thereafter, requires the department to include the following additional information, broken down by geographic distribution and categorized by minor, moderate, or serious violations, in its annual report to the Legislature:
  • Investigations and Enforcement: The number of investigations, inspections, and enforcement actions opened, closed, and conducted.
  • Petitions Filed: The number of petitions filed, as specified, against unlicensed persons.
  • Injunctions and Restitution: The number of injunctions or other appropriate restitution orders restraining unlicensed persons.
  • Citations and Collections: The number and dollar amount of citations issued and collected against unlicensed persons.
  • Civil Penalties: The number and dollar amount of civil penalties imposed and collected against unlicensed persons, persons aiding and abetting unlicensed commercial cannabis activity, and persons engaged in commercial cannabis property.
• Provides definitions for purposes of the Act, including:
  • “Enforcement prioritization policy” means an enforcement framework that aligns the department’s regulatory oversight, investigations, inspections, and enforcement and disciplinary actions pursuant to this division with the level of risk of harm.
  • “Minor violation” means conduct or conditions prohibited by this division and applicable regulations that create a negligible risk of harm, including, but not limited to, technical or administrative violations.
  • “Moderate violation” means conduct or conditions prohibited by this division and applicable regulations that create a risk of harm, including, but not limited to, the following:
    • Negligent failure to maintain accurate testing results, track and trace data, or required regulatory documentation.
    • Negligent violation of laws related to workplace safety or wage protection.
    • Manufacture, distribution, or sales of cannabis or cannabis products that are adulterated or misbranded in a manner unlikely to cause illness or bodily injury.
  • “Risk of harm” means the likelihood of any of the following:
    • Interference with enforcement of any state law.
    • False, misleading, or deceptive business practices.
    • Adversely affecting the environment or the health, safety, or welfare of the public.
  • “Serious violation” means conduct or conditions prohibited by this division and applicable regulations that create a significant risk of harm, including, but not limited to, the following:
    • Unlicensed persons engaging in commercial cannabis activity.
    • Licensees diverting cannabis or cannabis products to unlicensed persons.
    • Licensees inverting cannabis or cannabis products from unlicensed persons into the licensed market.
    • Licensees engaging in the manufacture, distribution, or sale of synthetic cannabinoids.
    • Licensees engaging in the distribution or sales of cannabis or cannabis products to children or that are marketed or packaged in a manner attractive to children.
    • Manufacture, distribution, or sales of cannabis or cannabis products that are adulterated or misbranded in a manner likely to cause illness or bodily injury.
    • Degradation of water resources, public lands, or wildlife habitat.
    • Reckless or repeated failure to maintain accurate testing results, track and trace data, or required regulatory documentation.
    • Reckless or repeated violation of laws related to workplace safety or wage protections.
• States legislative findings and declarations.

Related Legislation:

AB 1826 (Lackey, 2026) requires the DCC to provide a licensee with an opportunity to have an informal conference pertaining to a citation, a recall or an embargo, as specified. AB 1826 is pending in this committee.

-- END --

SENATE COMMITTEE ON

BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT

Senator Dr. Aisha Wahab, Chair

2025 - 2026 Regular

Bill No: Hearing Date: June 22, 2026

Subject:

SUMMARY:

Establishes the Cannabis Enforcement Accountability and Public Health Prioritization Act (Enforcement Act); requires the Department of Cannabis Control (DCC) to adopt and publish an enforcement prioritization policy, as specified, and requires the DCC to annually report specified enforcement data to the Legislature.

Existing law:

1. Establishes the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) to regulate the cultivation, distribution, transport, storage, manufacturing, processing, and sale of both medicinal cannabis and adult-use cannabis. (Business and Professions Code (BPC) § 26000)
   
2. Establishes the DCC, under the jurisdiction, of the Business, Consumer Services, and Housing Agency, to administer and regulate provisions of MAUCRSA. (BPC § 26010)
   
3. Requires the DCC to make and prescribe reasonable rules and regulations as necessary to implement, administer, and enforce its duties, which must be consistent with the purpose and intent of the Control, Regulate and Tax Adult Use of Marijuana Act. (BPC § 26013)
   
4. Prohibits a person from engaging in commercial cannabis activity without a license and is subject to civil penalties up to three times the amount of the license fee for each violation, as specified. (BPC §§ 26037.5, 26038)
   
5. Establishes grounds for disciplinary action against cannabis licensees which includes, but is not limited to the following:
6. Failure to comply with the provisions of this division or any rule or regulation adopted pursuant to this division.
7. Conduct that generally constitutes grounds for denial or discipline of a license of a license for licensing boards.
8. Any other grounds contained in regulations adopted by the DCC.
9. Failure to comply with any state law including, but not limited to, the payment of taxes as required under the Revenue and Taxation Code, except as provided.
10. Knowing violations of any state or local law, ordinance, or regulation conferring worker protections or legal rights on the employees of a licensee.
11. Failure to comply with the requirement of a local ordinance regulating commercial cannabis activity.
12. The intentional and knowing sale of cannabis or cannabis products by an A-licensee to a person under 21 years of age.
13. The intentional and knowing sale of medicinal cannabis or medicinal cannabis products by an M-licensee to a person without a physician’s recommendation.
14. Failure to maintain safe conditions for inspection by the DCC.
15. Failure to comply with any operating procedure submitted to the DCC in the application process.
16. Failure to comply with license conditions established for cultivation. (BPC § 26030)
17. Authorizes the DCC to suspend, revoke, place on probation with terms and conditions, or otherwise discipline licenses issued by the DCC and fine a licensee, after proper notice and hearing to the licensee, except in those cases when a license is procured fraud, then the DCC does not need to wait for a hearing to disciple. (BPC § 26031(a))
    
18. Authorizes an administrative law judge to direct a licensee, who has violated provisions of MAUCRSA, to pay a sum not to exceed the reasonable costs to investigate. (BPC § 26031.1)
    
19. Authorizes the DCC to issue a citation to a licensee or unlicensed person for any violation of MAUCRSA and requires the citation to be in writing and describe with particularity the basis of the citation, as specified, and each citation is required to notify licensees or unlicensed persons that they may request a hearing to contest the violation by submitting a written request within 30 days from services of the citation. (BPC § 26031.5(a)(c))
    
20. Requires the Director of the DCC to ensure that a sufficient number of employees are qualified peace officers to enforce the provisions of MAUCRSA. (BPC § 26035)
    
21. Requires the DCC when it has evidence that cannabis or a cannabis product is adulterated or misbranded, to notify the licensee. The licensee may conduct a voluntary recall of the affected cannabis or cannabis product and may remediate the cannabis or cannabis product, if approved by the DCC, or destroy the affected cannabis or cannabis product under the supervision of the DCC. (BPC § 26039.1)(a))
22. Permits the DCC to issue a mandatory recall order and require the licensee to immediately cease distribution of cannabis or a cannabis product and recall the cannabis or cannabis product if the department determines both of the following:
    
23. The cultivation, manufacture, distribution, or sale of the cannabis or cannabis product creates or poses an immediate and serious threat to human life or health.
    
24. Other procedures available to the department to remedy or prevent the occurrence of the situation would result in an unreasonable delay. (BPC § 260391(b))
25. Requires the DCC, by March 1 of each year, to prepare and submit to the Legislature an annual report on the DCC’s activities, post the report on the DCC website, and include in the report specified licensing and enforcement information for the previous fiscal year. (BPC § 26190)

Current Regulations.

1. Requires the DCC and its authorized representatives, for purposes of inspection, investigation, review, or audit, to have full and immediate access to:
   
2. Enter any premises licensed by the Department.
   
3. Inspect and test any vehicle or equipment possessed by, in control of, or used by a licensee or their agents and employees for the purpose of conducting commercial cannabis activity.
   
4. Test any cannabis goods or cannabis-related materials or products possessed by, in control of, or used by a licensee or their agents and employees for the purpose of conducting commercial cannabis activity.
   
5. Copy any materials, books, or records of any licensee or their agents and employees. (Title 4, California Code of Regulations (CCR) § 17800)
   
6. Authorizes the DCC to issue a Notice to Comply to a licensee for violation(s) of MAUCRSA discovered during an investigation or audit or observed during an inspection, and the Notice to Comply must 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. (4 CCR § 17801(a)(b))
   
7. Authorizes the DCC to 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, and the licensee must 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 DCC. (16 CCR § 17801(c-e))
   
8. Allow the DCC to embargo cannabis or cannabis products to prevent their sale, disposal, or removal from the location when the DCC 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, and clarifies that to embargo cannabis or cannabis products, the DCC must:
   
9. 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;
   
10. Affix a tag or marking to the cannabis or cannabis products, or component thereof, subject to embargo; and
    
11. Provide an inventory of the embargoed items to the licensee or product owner. (4 CCR § 17801.5)

This bill:

1. Establishes the Cannabis Enforcement Accountability and Public Health Prioritization Act of 2026 (Enforcement Act).
   
2. Defines the following for purposes of this bill:
   
3. “Enforcement prioritization policy” to mean an enforcement framework that aligns the department’s regulatory oversight, investigations, inspections, and enforcement and disciplinary actions pursuant to this division with the level of risk of harm.
   
4. “minor violation” to mean conduct or conditions prohibited by this division and applicable regulations that create a negligible risk of harm, including, but not limited to, technical or administrative violations.
   
5. “moderate violation” to mean conduct or conditions prohibited by this division and applicable regulations that create a risk of harm, including, but not limited to, the following:
   
   • 1. Negligent failure to maintain accurate testing results, track and trace data, or required regulatory documentation.
        
     2. Negligent violations of laws related to workplace safety or wage protection.
        
     3. Manufacture, distribution, or sales of cannabis or cannabis products that are adulterated or misbranded in a manner unlikely to cause illness or bodily injury.
        
6. “risk of harm” to mean the likelihood of interference with enforcement of any state law; false, misleading, or deceptive business practices; or adversely affecting the environment or the health, safety, or welfare of the public.
   
7. “serious violation” to mean conduct or conditions prohibited by MAUCRSA and applicable regulations that create a significant risk of harm, including, but not limited to, unlicensed persons engaging in commercial cannabis activity; licensees diverting cannabis or cannabis products to unlicensed persons; licensees inverting cannabis or cannabis products from unlicensed persons into the licensed market; licensees engaging in the distribution or sales of cannabis or cannabis products to children or that are marketed or packaged in a manner attractive to children; manufacture, distribution, or sales of cannabis or cannabis products that are adulterated or misbranded in a manner likely to cause illness or bodily injury; degradation of water resources, public lands, or wildlife habitat; reckless or repeated failure to maintain accurate testing results, track and trace data, or required regulatory documentation; or, reckless or repeated violation of laws related to workplace safety or wage protections; or, licensees engaging in the manufacture, distribution, or sale of synthetic cannabinoids.
   
8. Requires the DCC, in implementing the Enforcement Act to prioritize regulatory oversight, investigations, inspections, and enforcement and disciplinary actions in a manner consistent with an enforcement prioritization policy based on the following categories which are listed in order from highest to lowest priority:
   
9. Serious violations.
   
10. Moderate violations.
    
11. Minor violations.
    
12. Requires the DCC to adopt and publish an enforcement prioritization policy to implement the Enforcement Act that at a minimum does all the following:
    
13. Ensure personnel and resources are allocated in a manner consistent with the priority of violations.
    
14. Establish the enforcement and disciplinary actions for each category of violations.
    
15. Provide for documentation of enforcement actions involving all violations.
    
16. Prohibits the DCC’s disciplinary framework or guidelines for disciplinary action from conflicting with the requirements of the Enforcement Act.
    
17. States that the Enforcement Act does limit the DCC’s authority to enforce provisions of MAUCRSA and applicable regulations.
    
18. Requires the DCC to include the following in its annual report to the Legislature:
    
19. The number and geographic distribution of investigations opened and closed in relation to minor, moderate or serious violations.
    
20. The number and geographic distribution of inspections conducted in relation to minor, moderate or serious violations.
    
21. The number and geographic distribution of enforcement actions conducted in relation to minor, moderate or serious violations.
    
22. The number and geographic distribution of petitions filed, as specified, against unlicensed persons and in relation to minor, moderate or serious violations.
    
23. The number and geographic distribution of injunctions or other appropriate restitution orders restraining unlicensed persons in relation to minor, moderate or serious violations.
    
24. The number, geographic distribution, and dollar amount of citations issued and collected against unlicensed persons in relation to minor, moderate or serious violations
    
25. The number, geographic distribution, and dollar amount of civil penalties imposed and collected against unlicensed persons, persons aiding and abetting unlicensed commercial cannabis activity, and persons engaged in commercial cannabis property in relation to minor, moderate or serious violations.
26. Makes findings and declarations related to the DCC’s enforcement process for the regulated cannabis industry and the illicit cannabis market, as specified.
    

FISCAL EFFECT:

According to the Assembly Committee on Appropriations, DCC notes the data required for reporting pursuant to this bill is held in multiple technology systems that are not currently capable of cross-sharing information, and, in some cases, is not easily retrieved from those systems. Reporting this information would require modifications to these systems, new integrations of data, and coordination between multiple divisions. DCC estimates costs of approximately $600,000 one-time to implement system changes and development; however, costs could increase depending on implementation approach, vendor requirements, and system design. DCC also anticipates ongoing costs for maintenance, reporting, and staff support. The bill may result in additional cost pressures of an unknown amount may result as DCC notes that the prioritization structure of the bill seems to raise evidentiary standards for serious violations. According to DCC, the prioritization structure could also result in an increase in appeals, if appeals are filed on the grounds that the violation of law was not a serious violation.

COMMENTS:

1. Purpose. The California Cannabis Operators Association is the sponsor of this bill. According to the Author, “AB 2537 strengthens California’s cannabis enforcement framework by directing regulators to prioritize violations that pose meaningful risks to public health, safety, and market integrity. It establishes a statutory definition of conduct that constitutes a “risk of harm” and requires the Department of Cannabis Control (DCC) to implement a risk-based enforcement approach that focuses resources on the most serious violations while maintaining full regulatory authority over all violations.”
2. Background.

Cannabis and Cannabis Regulation. In 1996, California first legalized medicinal cannabis via Proposition 215, also known as the Compassionate Use Act. Proposition 215 protected qualified patients and primary caregivers from prosecution related to the possession and cultivation of cannabis for medicinal purposes. In 2003, the Legislature authorized the formation of medical marijuana cooperatives—nonprofit organizations that cultivate and distribute marijuana for medical uses to their members through dispensaries.

In 2015, Governor Brown signed three bills into law that created a comprehensive state licensing and regulatory framework governing the commercial cultivation, manufacture, retail sale, transport, distribution, delivery, and testing of medical cannabis in California. AB 243 (Wood, Chapter 688, Statutes of 2015), AB 266 (Bonta, Chapter 689, Statutes of 2015), and SB 643 (McGuire, Chapter 719, Statutes of 2015) collectively established the Medical Marijuana Regulation and Safety Act (later renamed to the Medical Cannabis Regulation and Safety Act (MCRSA)), to be administered by a number of state agencies: a Bureau of Cannabis Control within the Department of Consumer Affairs; the California Department of Public Health; and the California Department of Food and Agriculture.

Shortly following the passage of MCRSA, in November 2016, California voters passed Proposition 64, the “Control, Regulate and Tax Adult Use of Marijuana Act” (Prop 64), which decriminalized and legalized adult-use cannabis. Less than a year later in June 2017, the California State Legislature passed a budget trailer bill, SB 94 (Committee on Budget and Fiscal Review, Chapter 27, Statutes of 2017), that integrated MCRSA with Prop 64 to create the Medical and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), the current regulatory structure for both medicinal and adult-use cannabis. In 2020, Governor Newsom proposed consolidation of the three original licensing and regulatory programs within separate state agencies to form a single department with a goal of streamlining and simplifying access to licensing and regulatory oversight of cannabis. In 2021, DCC was established with licensing, regulatory and enforcement authority. Currently, cannabis and cannabis products are regulated throughout the lifecycle of the product. Under current law, a separate license is required for every corner of the cannabis market which includes growing cannabis, transporting cannabis, making cannabis products, testing cannabis products, selling cannabis, and holding an event where cannabis is sold. Each license type is distinct and must be approved before operating. Current law with respect to the DCC’s oversight states that “protection of the public is of the highest priority”.

Licensing and Enforcement. Under current law, a cannabis license is required for every corner of the cannabis market, including growing cannabis, transporting cannabis, making cannabis products, testing cannabis products, selling cannabis, and holding an event where cannabis is sold. Each license type is distinct and must be approved before operating. To obtain a state cannabis license, the applicant must have approval from their local jurisdiction to conduct the cannabis business for which they seek a license. Currently, 256 out of 540 cities and counties allow at least one type of cannabis and 284 of those do not allow for any type of cannabis business.

As the enforcement arm for both the legal and illegal cannabis market, the DCC has broad enforcement authority. Pursuant to current law, (BPC § 26030), there are a multitude of violations for which the DCC can levy an enforcement action against a licensee or non-licensee. Violations range from those listed in statute which includes, but is not limited to, failure to comply with state laws, include tax violations, selling cannabis to persons under 21 years of age, selling medicinal cannabis to patients without a physician’s recommendation if an M-licensee, and failure to comply with any regulation adopted by the DCC. Current regulations include violations for storage requirements, name tag identification violations, improper acceptance or rejection of cannabis product shipments, non-compliance with security requirements or video surveillance requirements, to name only few.

In 2022, the DCC created recommended uniform disciplinary guidelines (guidelines) which serve to provide consistency when determining disciplinary cases on a statewide basis; however, the guidelines apply only to those cases applicable to formal discipline. Administrative citations and fines are not included. Pursuant to the current guidelines when the DCC is considering revocation, suspension, probation, fine or a combination of those actions, the DCC will consider elements of the violation as follows:

• Nature and gravity of the act(s), violations, offenses, or crime(s) under consideration.
• Actual or potential harm to the public.
• Actual or potential harm to any consumer.
• Prior disciplinary and/or administrative record.
• Number and/or variety of current violations.
• Mitigating evidence.
• Rehabilitation evidence, including but not limited to, a statement of rehabilitation containing any evidence that demonstrates fitness for licensure, or a certificate of rehabilitation under Penal Code section 4852.01.
• In case of a criminal conviction, compliance with conditions of sentence and/or court ordered probation.
• Overall criminal record.
• Time passed since the act(s) or offense(s) occurred.

The guidelines recommend penalties based on the severity of the violation, which are categorized in Tier 1-Tier 3. Tier 1 violations are recommended for violations which are potentially harmful. There are over 40 violations in the Tier 1 category which includes violations like the unauthorized storage of inventory, failure to properly display name tags, advertising and marketing violations, not properly confirming age verifications and using pesticides on cannabis plants, to name a few. Tier 1 penalties are recommending a minimum penalty of a stayed revocation, 5-15 days suspension, a fine or a combination of a fine and suspension. The maximum penalty is a revocation.

Tier 2 violations are reserved for violations which have a serious potential for harm or involve greater risk and disregard of public safety. There are over 40 violations in the Tier 2 category and range from violations which include holding an interest in a licensed testing laboratory and other regulation of commercial cannabis, subletting of a retail premises, failure to comply with track and trace requirements, failure to account for inventory, failure to follow good laboratory practices, and prohibited attire and conduct, among others. The maximum and minimum penalties are the same as Tier 1.

Tier 3 discipline is recommended for knowingly or willfully violating laws or regulations pertaining to commercial cannabis activity or fraudulent acts relating to the licenses’ commercial cannabis business. There are less than 30 violations in the Tier 3 category and include violations such as the retail sale of untested cannabis goods, conducting commercial cannabis activity with non-licensees, false statement or omission on an application, failure to pay taxes and violation of an embargo, to name a few. The recommended minimum penalties for Tier 3 violations are a stayed revocation, 45-day suspension, a fine, or a combination of a suspension and a fine and the maximum is suspension. The guidelines also include minimum and maximum fine amounts based on the violation and the tier.

The guidelines also delineate fines and violations specific to cultivators. For violations of cultivators, they are divided into serious, moderate, and minor categories. Minor violations are those deemed not likely to pose serious health or environmental risks, moderate violations are categorized as those that undermine enforcement of any state law, are likely to cause public or environmental harm, or are a repeat of a minor violation within a designated timeframe, and serious violations are those that that preclude or significantly interfere with enforcement of any state law, or those violations that cause significant false, misleading, or deceptive business practices, potential for significant level of public or environmental harm, or for any violation that is a repeat of a moderate violation within a specified timeframe.

The author notes that the current law provides broad enforcement discretion without clear statutory direction regarding how limited enforcement resources should be prioritized. In practice, this can result in significant attention to technical violations among licensed operators, while more complex, higher-risk conduct - such as product contamination, diversion, fraud, environmental harm, workplace safety violations, and unlawful sales to minors - can receive comparatively less enforcement attention.

This bill will require the DCC to create a new enforcement prioritization policy, as defined, based on specified categories, that are listed from highest to lowest risk of harm. The bill would define “risk of harm” as conduct, practices, or conditions that are reasonably expected to, the likelihood of, among other things, interfere interference with enforcement of state law. The bill would require the department to adopt and publish an enforcement prioritization policy, as specified,

The author notes that this bill is necessary because although current law provides broad enforcement discretion without clear statutory direction regarding how limited enforcement resources should be prioritized. In practice, this can result in significant attention to technical violations among licensed operators, while more complex, higher-risk conduct - such as product contamination, diversion, fraud, environmental harm, workplace safety violations, and unlawful sales to minors - can receive comparatively less enforcement attention.

Annual Report. The DCC is required to submit an annual report to the Legislature on DCC’s activities and make it publicly available. The report needs to provide data points about specific licensing and enforcement details which includes the number of licenses issued, suspended, denied, revoked; the processing times for applications; number of appeals; summary of complaints submitted by the public or local governments broken down by geographic regions; number of penalties administered; number of licenses with imposed conditions, number of petitions for regulatory relief, among other data. The DCC’s 2025 Annual Report includes important information related to enforcement numbers, licensing timelines, along with the amount of expenditure for enforcement-related activities among other information. The report delineates the total number of complaints received and provides the number of citations received in each city and a county. The report currently provides the number of citations issued and the total monetary amount of assessed penalties. The report includes the number of embargoes, voluntary condemnations and mandatory recalls. However, that information is not delineated by geographic region.

This bill adds additional data points that the DCC will need to incorporate into its annual report to the Legislature including the number, geographic distribution, and, as applicable, dollar amount of specified enforcement activities in relation to the risk-based enforcement framework that this bill requires the DCC to establish.

1. Related Legislation. AB 1826 (Lackey of 2026) modifies the DCC’s notification and informal conference requirements under MAUCRSA for citations, recalls, embargos, and condemnations. (Status: This bill is pending in this Committee)

AB 1126 (Lackey, Chapter 563, Statutes of 2023) makes it a violation for a person to use or possess the cannabis universal symbol, established through regulations, in connection with commercial activity, other than licensed commercial cannabis activity, as specified; requires a person using or possessing the universal symbol in connection with commercial cannabis activity to maintain records and produce records upon demand, as specified; and, provides the California Department of Tax and Fee Administration with authority to seize a package, label, advertisement, or other document or object in violation of the universal symbol use and deem it contraband, as specified.

AB 1448 (Wallis, Chapter 843, Statutes of 2023) redirects specified portions of civil penalties collected for unlicensed commercial cannabis activity from the General Fund to the treasurers of localities that brought the action for the penalties.

AB 1171 (Blanca Rubio, Chapter 467, Statutes of 2023) authorizes a licensee under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) to bring a civil action in superior court against a person engaging in commercial cannabis activities without a license, as specified.

1. Arguments in Support. The California Cannabis Operators Association writes in support and notes, “AB 2537 establishes a clear, risk-based enforcement framework directing the Department of Cannabis Control (DCC) to prioritize enforcement and disciplinary actions based on the level of risk posed to public health, safety, environmental protection, and the integrity of California’s regulated cannabis market.

“Importantly, AB 2537 does not reduce the DCC’s enforcement authority, create new causes of action, or prohibit enforcement against any category of violation. Rather, the bill provides policy direction to ensure that limited enforcement resources are focused first on the most serious threats, including unlicensed commercial activity, unlawful diversion, sales to minors, synthetic cannabinoids, unsafe products, and significant environmental harms.”

1. Arguments in Opposition. Origins Council writes in opposition and notes, “In concept, we support a re-evaluation of DCC enforcement priorities, particularly in relation to overly punitive enforcement on small operators in the licensed market. Since 2025, small licensees have reported a substantial increase in DCC enforcement on licensed operators, including a significant increase in no-notice inspections, punitive fines, embargoes, and recalls. DCC budget proposal documents from January 2026 confirm a recent “exponential rise in compliance actions such as recalls, citations, and revocations. “Many small operators have additionally reported significant concerns regarding due process, effective communication with compliance staff, and timely resolution of compliance issues. These factors have led us to strongly support AB 1826 (Lackey), currently pending legislation which would expand due process protections for licensees facing DCC compliance actions.

“While AB 2537 identifies real problems, we are concerned that the bill’s structural approach - to establish detailed enforcement priorities in statute - will not effectively address these problems and instead risks compounding them.”

1. Policy Issues for Consideration and Suggested Author’s amendment.

Delayed Implementation. Should this bill be signed into law, the DCC will be required to create a new enforcement prioritization policy which is likely to require the DCC to completely revise its current disciplinary guidelines. The DCC will need to update its prioritization policy to ensure violations that were once considered a Tier 2 violation would be considered a Moderate Violation or Minor Violation and will likely require significant staff time and resources, and the DCC will need to review every violation in statute and regulations to ensure they are consistent with the new required guidelines. This bill is set to take effect on January 1, 2027, and the DCC is required to submit its annual report by March 1 of that year. This time frame does not provide the DCC with sufficient time to collect or analyze the new data points this bill is mandating the DCC to include in its annual report, especially as the data will apply to violations in the minor, moderate and serious categories, which have yet to be determined by the DCC. To ensure continuity in the enforcement process, the implementation of this bill should be delayed until January 1, 2028, to provide the DCC with sufficient time to revise its enforcement policies while maintaining consistency in the enforcement process. In addition to providing the DCC with sufficient time to collect and report this data, the bill should be amended to require the new data points effective with the March 1, 2028, report.

Should the new enforcement guidelines required by this bill include consideration for cultivation licensees as is in the current disciplinary guidelines created by the DCC? This bill would require the DCC to establish an enforcement prioritization polity which would broadly apply to all of the licensing types under the DCC’s jurisdiction. DCC’s current disciplinary guidelines provide fine amounts and violations which are specific to cultivator licensees. The Author should continue to work with stakeholders, including the DCC, to review the broad applicability of minor, moderate and serious violations to ensure that they are applied to licensees appropriately, in recognition of the varying activities of cannabis licensees.

SUPPORT AND OPPOSITION:

Support:

California Cannabis Operators Association (source)

Opposition:

Origins Council

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2537

Author:(Chen)

As Amended Ver:April 15, 2026

Majority vote

SUMMARY

Requires the Department of Cannabis Control (DCC) to 1) prioritize its enforcement and disciplinary actions under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) based on the seriousness of the violation, 2) develop a policy pursuant to those priorities, and (3) include specified enforcement data points in its annual activities report.

Major Provisions

1. Specifies that the provisions of this bill may be cited as the "Cannabis Enforcement Accountability and Public Health Prioritization Act of 2026."
2. Defines "enforcement prioritization policy" as an enforcement framework that aligns the DCC's regulatory oversight, investigations, inspections, and enforcement and disciplinary actions pursuant to MAUCRSA with the level of risk of harm.
3. Defines "minor violation" as conduct or conditions prohibited under MAUCRSA and applicable regulations that create a negligible risk of harm, including technical or administrative violations.
4. Defines "moderate violation" as conduct or conditions prohibited by MAUCRSA and applicable regulations that create a risk of harm, including the following:
   1. Negligent failure to maintain accurate testing results, track and trace data, or required regulatory documentation.
   2. Negligent violation of laws related to workplace safety or wage protection.
   3. Manufacture, distribution, or sales of cannabis or cannabis products that are adulterated or misbranded in a manner unlikely to cause illness or bodily injury.
5. Defines "serious violation" as conduct or conditions prohibited by MAUCRSA and applicable regulations that create a significant risk of harm, including the following:
   1. Unlicensed persons engaging in commercial cannabis activity.
   2. Licensees diverting cannabis or cannabis products to unlicensed persons.
   3. Licensees inverting cannabis or cannabis products from unlicensed persons into the licensed market.
   4. Licensees engaging in the manufacture, distribution, or sale of synthetic cannabinoids.
   5. Licensees engaging in the distribution or sales of cannabis or cannabis products to children or that are marketed or packaged in a manner attractive to children.
   6. Manufacture, distribution, or sales of cannabis or cannabis products that are adulterated or misbranded in a manner likely to cause illness or bodily injury.
   7. Degradation of water resources, public lands, or wildlife habitat.
   8. Reckless or repeated failure to maintain accurate testing results, track and trace data, or required regulatory documentation.
   9. Reckless or repeated violation of laws related to workplace safety or wage protections.
6. Defines "risk of harm" as the likelihood of any of the following:
   1. Interference with enforcement of any state law.
   2. False, misleading, or deceptive business practices.
   3. Adversely affecting the environment or the health, safety, or welfare of the public.
7. Requires the DCC to prioritize regulatory oversight, investigations, inspections, and enforcement and disciplinary actions in a manner consistent with an enforcement prioritization policy based on the following categories, which are listed in order from highest to lowest:
   1. Serious violations.
   2. Moderate violations.
   3. Minor violations.
8. Requires the DCC to adopt and publish an enforcement prioritization policy to implement the provisions of this bill that does, at a minimum, all of the following:
   1. Ensures personnel and resources are allocated in a manner consistent with the DCC's enforcement prioritization.
   2. Establishes the enforcement and disciplinary actions for each category of violation.
   3. Provides for documentation of enforcement actions involving all violations.
9. Prohibits the DCC's disciplinary framework or guidelines for disciplinary action from conflicting with the priorities established pursuant to the provisions of this bill.
10. Clarifies that the prioritization requirement does not limit the DCC's authority to enforce MAUCRSA and applicable regulations.
11. Requires the DCC to include the following information in its annual report in relation to the violation severity categories established under this bill:
    1. The number and geographic distribution of investigations opened and closed.
    2. The number and geographic distribution of inspections conducted.
    3. The number and geographic distribution of enforcement actions conducted.
    4. The number and geographic distribution of court petitions filed against unlicensed persons.
    5. The number and geographic distribution of injunctions or other appropriate orders restraining unlicensed persons.
    6. The number, geographic distribution, and dollar amount of citations issued and collected against unlicensed persons.
    7. The number, geographic distribution, and dollar amount of civil penalties imposed and collected against unlicensed persons, persons aiding and abetting unlicensed commercial cannabis activity, and specified owners or managers of property used for unlicensed commercial cannabis activity.
12. Makes various legislative findings and declarations.

COMMENTS

Background. The MAUCRSA, which incorporates prior cannabis laws, authorizes a person who obtains a state license under MAUCRSA to engage in commercial adult-use cannabis activity under that license and any applicable local ordinances. The DCC is the state agency that licenses and regulates commercial cannabis activity. Specifically, the DCC regulates:

1. Growing of cannabis plants.
2. Manufacture of cannabis products.
3. Transportation and tracking of cannabis goods throughout the state.
4. Sale of cannabis goods.
5. Events where cannabis is sold or used.
6. Labeling of goods sold at retail.

Enforcement. The DCC's goal in enforcing the requirements of MAUCRSA is to protect the public from the harms that may result from unregulated commercial cannabis activity. If a licensee violates MAUCRSA or other relevant laws, MAUCRSA authorizes the DCC to take direct administrative or disciplinary action against the licensee. The administrative actions include warnings, citations, fines, and orders of abatement. The formal disciplinary actions include probation, suspension, and ultimately revocation. In addition, MAUCRSA authorizes the DCC to take actions against cannabis products that to not meet the requirements of MAUCRSA.

The DCC has further specified the enforcement process in its regulations and a document titled Disciplinary Guidelines for all Commercial Cannabis Licenses (amended July 2022) to inform licensees of the process and to standardize enforcement actions and outcomes.

Unlicensed Market. Regulators and stakeholders continue to raise significant concerns over cannabis operations that do business outside of the regulatory scheme. They can avoid fees and taxes while competing with lawful businesses. They also create the potential for consumer and environmental harm, avoiding testing and agricultural requirements.

Normally, licensing agencies regulate problematic licensed and unlicensed activity by imposing administrative penalties against an existing license (the strongest of which is revocation of the license), or by withholding the issuance of a license until any problems or deficiencies are addressed. However, the difficulty in regulating unlicensed businesses that do not plan to obtain a license, including unlicensed cannabis businesses, is that there is no incentive to comply with the administrative penalties because the license is irrelevant to them.

As a result, MAUCRSA includes various civil penalties that are sought in court and are not tied to the licensing process, which can be brought by the DCC, the Attorney General, or local public attorneys. There are individual penalties of up to three times the amount of the required license fee (which vary based on gross annual revenue, up to $300,000 for a microbusiness with gross annual revenue of $80,000,000). There are also civil penalties of up to $30,000 per day of operation for aiding and abetting unlicensed cannabis activity, which means a person encouraged, aided, or facilitated, the activity (not just mere knowledge of the activity). The sponsor notes that another aim of this bill is to ensure the DCC dedicates sufficient resources towards the deterrence and prosecution of unlicensed activity.

According to the Author

[This bill] strengthens California's cannabis enforcement framework by directing regulators to prioritize violations that pose meaningful risks to public health, safety, and market integrity. It… requires the Department of Cannabis Control (DCC) to implement a risk-based enforcement approach that focuses resources on the most serious violations while maintaining full regulatory authority over all violations.

Arguments in Support

The scale of California's illicit market underscores the urgency of prioritizing enforcement resources where they will have the greatest impact. Recent analysis commissioned by the Department of Cannabis Control (DCC) indicates that the majority of cannabis consumed in California is still supplied by the illicit market.

In the California Cannabis Market Outlook, researchers estimate that only about 40% of cannabis consumed in California is supplied through the licensed market, while roughly 60% remains attributable to illicit production and sales. Of the approximately 3.8 million pounds of cannabis consumed annually in the state, only about 1.4 million pounds move through the licensed supply chain, leaving roughly 2.4 million pounds outside the regulated system.

This dynamic creates significant risks for public health, consumer safety, environmental compliance, and the viability of licensed businesses operating under California's rigorous regulatory framework.

At the same time, licensed operators across the state have reported increasing concern regarding the allocation of enforcement resources. Over the past year, many operators have experienced enforcement actions, often referred to by the Department as "compliance actions," that appear focused on minor or highly technical compliance issues, including the reopening of previously resolved matters, notices issued weeks after inspections that initially yielded no violations, and corrective actions based on factual inaccuracies or inconsequential administrative issues. Addressing these matters often requires substantial time and financial resources for businesses already operating under significant financial strain.

In May 2025, a broad coalition representing a majority of California's licensed cannabis operators formally raised these concerns in correspondence to the DCC, urging the Department to reassess its compliance and enforcement strategies and refocus resources on the most pressing threats to public health and market integrity. These threats include diversion into and from the legal market, product safety and testing compliance, unlawful sales to minors, and illegal retail activity that undermines the state's regulated supply chain and associated tax revenue. When enforcement resources are finite, clear statutory direction regarding enforcement priorities becomes essential.

Arguments in Opposition

None on file

FISCAL COMMENTS

According to the Assembly Appropriations Committee:

DCC reports the data required for reporting pursuant to this bill is held in multiple technology systems that are not currently capable of cross-sharing information, and, in some cases, is not easily retrieved from those systems. Reporting this information would require modifications to these systems, new integrations of data, and coordination between multiple divisions. DCC estimates costs of approximately $600,000 one-time to implement system changes and development; however, costs could increase depending on implementation approach, vendor requirements, and system design (Cannabis Control Fund). DCC also anticipates ongoing costs for maintenance, reporting, and staff support.

Additional cost pressures of an unknown amount may result as DCC notes that the prioritization structure of the bill seems to raise evidentiary standards for serious violations. According to DCC, the prioritization structure could also result in an increase in appeals, if appeals are filed on the grounds that the violation of law was not a "serious" violation.

VOTES

ASM BUSINESS AND PROFESSIONS: 19-0-0

YES: Berman, Johnson, Addis, Ahrens, Alanis, Bains, Bauer-Kahan, Caloza, Chen, Elhawary, Hadwick, Haney, Hart, Irwin, Jackson, Lowenthal, Macedo, Nguyen, Pellerin

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Hoover, Aguiar-Curry, Calderon, Caloza, Dixon, Fong, Mark González, Krell, Pacheco, Pellerin, Sharp-Collins, Solache, Ta, Tangipa

UPDATED

VERSION: April 15, 2026

CONSULTANT: Vincent Chee / B. & P. / (916) 319-3301 FN: 0002941

Date of Hearing: May 6, 2026

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2537

Author:(Chen) – As Amended Ver:April 15, 2026

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

Requires the Department of Cannabis Control (DCC) to prioritize its enforcement and disciplinary actions based on the risk of harm, as defined, develop a policy pursuant to those priorities, and include specified enforcement data in its annual activities report.

Specifically, this bill:

1. Defines “enforcement prioritization policy” as an enforcement framework that aligns the DCC’s regulatory oversight, investigations, inspections, and enforcement and disciplinary actions pursuant to Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) with the level of risk of harm.
   
2. Defines “minor violation” as conduct or conditions prohibited under MAUCRSA and applicable regulations that create a negligible risk of harm, including technical or administrative violations.
   
3. Defines “moderate violation” as conduct or conditions prohibited by MAUCRSA and applicable regulations that create a risk of harm, including the following:
   
   1. Negligent failure to maintain accurate testing results, track and trace data, or required regulatory documentation.
      
   2. Negligent violation of laws related to workplace safety or wage protection.
      
   3. Manufacture, distribution, or sales of cannabis or cannabis products that are adulterated or misbranded in a manner unlikely to cause illness or bodily injury.
      
4. Defines “serious violation” as conduct or conditions prohibited by MAUCRSA and applicable regulations that create a significant risk of harm, including the following:
   
   1. Unlicensed persons engaging in commercial cannabis activity.
      
   2. Licensees diverting cannabis or cannabis products to unlicensed persons.
      
   3. Licensees inverting cannabis or cannabis products from unlicensed persons into the licensed market.
      
   4. Licensees engaging in the manufacture, distribution, or sale of synthetic cannabinoids.
      
   5. Licensees engaging in the distribution or sales of cannabis or cannabis products to children or that are marketed or packaged in a manner attractive to children.
      
   6. Manufacture, distribution, or sales of cannabis or cannabis products that are adulterated or misbranded in a manner likely to cause illness or bodily injury.
      
   7. Degradation of water resources, public lands, or wildlife habitat.
      
   8. Reckless or repeated failure to maintain accurate testing results, track and trace data, or required regulatory documentation.
      
   9. Reckless or repeated violation of laws related to workplace safety or wage protections.
      
5. Defines “risk of harm” as the likelihood of any of the following: interference with enforcement of any state law; false, misleading, or deceptive business practices; or adversely affecting the environment or the health, safety, or welfare of the public.
   
6. Requires the DCC to prioritize regulatory oversight, investigations, inspections, and enforcement and disciplinary actions in a manner consistent with an enforcement prioritization policy based on the following categories, which are serious, moderate, and minor violations.
   
7. Requires the DCC to adopt and publish an enforcement prioritization policy to implement the provisions of this bill that does, at a minimum, all of the following:
   
   1. Ensures personnel and resources are allocated in a manner consistent with the DCC’s enforcement prioritization.
      
   2. Establishes the enforcement and disciplinary actions for each category of violation.
      
   3. Provides for documentation of enforcement actions involving all violations.
      
8. Prohibits the DCC’s disciplinary framework or guidelines for disciplinary action from conflicting with the priorities established pursuant to the provisions of this bill.
   
9. Clarifies that the prioritization requirement does not limit the DCC’s authority to enforce MAUCRSA and applicable regulations.
   
10. Requires the DCC to include the following information in its annual report in relation to the violation severity categories established under this bill:
    
    1. The number and geographic distribution of: investigations opened and closed, inspections conducted, enforcement actions conducted, court petitions filed against unlicensed persons, and injunctions or other appropriate orders restraining unlicensed persons.
    2. The number, geographic distribution, and dollar amount of citations issued and collected against unlicensed persons.
       
    3. The number, geographic distribution, and dollar amount of civil penalties imposed and collected against unlicensed persons, persons aiding and abetting unlicensed commercial cannabis activity, and specified owners or managers of property used for unlicensed commercial cannabis activity.
       

FISCAL EFFECT:

DCC reports the data required for reporting pursuant to this bill is held in multiple technology systems that are not currently capable of cross-sharing information, and, in some cases, is not easily retrieved from those systems. Reporting this information would require modifications to these systems, new integrations of data, and coordination between multiple divisions. DCC estimates costs of approximately $600,000 one-time to implement system changes and development; however, costs could increase depending on implementation approach, vendor requirements, and system design (Cannabis Control Fund). DCC also anticipates ongoing costs for maintenance, reporting, and staff support.

Additional cost pressures of an unknown amount may result as DCC notes that the prioritization structure of the bill seems to raise evidentiary standards for serious violations. According to DCC, the prioritization structure could also result in an increase in appeals, if appeals are filed on the grounds that the violation of law was not a “serious” violation.

COMMENTS:

1. Purpose. This bill is sponsored by the California Cannabis Operator’s Association. According to the author:

[This bill] strengthens California’s cannabis enforcement framework by directing regulators to prioritize violations that pose meaningful risks to public health, safety, and market integrity. It… requires [DCC] to implement a risk-based enforcement approach that focuses resources on the most serious violations while maintaining full regulatory authority over all violations.

1. Background. MAUCRSA, which incorporates prior cannabis laws, authorizes a person who obtains a state license under MAUCRSA to engage in commercial adult-use cannabis activity under that license and any applicable local ordinances. DCC is the state agency that licenses and regulates commercial cannabis activity.

Regulators and stakeholders continue to raise significant concerns over cannabis operations that operate outside of the regulatory scheme, thereby avoiding fees and taxes while competing with lawful businesses. They also create the potential for consumer and environmental harm, avoiding testing and agricultural requirements. Normally, licensing agencies regulate problematic licensed and unlicensed activity by imposing administrative penalties against an existing license (the strongest of which is revocation of the license), or by withholding the issuance of a license until any problems or deficiencies are addressed. However, unlicensed businesses that do not plan to obtain a license, have no incentive to comply with administrative penalties because the license is irrelevant to them.

For this reason, MAUCRSA includes various civil penalties that are sought in court and are not tied to the licensing process, and can be brought by the DCC, the Attorney General, or local public attorneys. There are individual penalties of up to three times the amount of the required license fee (which varies based on gross annual revenue, up to $300,000 for a microbusiness with gross annual revenue of $80,000,000). There are also civil penalties of up to $30,000 per day of operation for aiding and abetting unlicensed cannabis activity, which means a person encouraged, aided, or facilitated, the activity (not just mere knowledge of the activity). The sponsor notes that another aim of this bill is to ensure DCC dedicates sufficient resources towards the deterrence and prosecution of unlicensed activity.

Analysis Prepared by: Allegra Kim / APPR. / (916) 319-2081

Date of Hearing:

ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS

Marc Berman, Chair

ABPCA Bill Id:AB 2537

Author:Chen – As Amended Ver:April 9, 2026

SUBJECT: Cannabis Enforcement Accountability and Public Health Prioritization Act of 2026.

SUMMARY: Requires the Department of Cannabis Control (DCC) to prioritize its enforcement and disciplinary actions based on the seriousness of a violation, develop a policy pursuant to those priorities, and include specified enforcement data points in its annual activities report.

EXISTING LAW:

1. Regulates the cultivation, distribution, transport, storage, manufacturing, processing, and sale of medicinal and adult-use cannabis under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) and establishes the DCC to administer and enforce the act. (Business and Professions Code (BPC) §§ 26000-26260)
2. Prohibits a person or entity from engaging in commercial cannabis activity without a state license issued by the DCC. (BPC § 26037.5)
3. Establishes 20 types of cannabis licenses, including subtypes, for cultivation, manufacturing, testing, retail, distribution, and microbusiness. (BPC § 26050)
4. Lists the following grounds for license disciplinary action, which is not exhaustive:
   1. Failure to comply with the provisions of this division or any rule or regulation adopted pursuant to this division. (BPC § 26030(a)) 
   2. Conduct that generally constitutes grounds for denial or discipline of a license of a license for licensing boards. (BPC §§ 26030(b); 480-489; 490-494.6) 
   3. Any other grounds contained in regulations adopted by the DCC. (BPC § 26030(c)) 
   4. Failure to comply with any state law including, but not limited to, the payment of taxes as required under the Revenue and Taxation Code, except as provided. (BPC § 26030(d)) 
   5. Knowing violations of any state or local law, ordinance, or regulation conferring worker protections or legal rights on the employees of a licensee. (BPC § 26030(e)) 
   6. Failure to comply with the requirement of a local ordinance regulating commercial cannabis activity. (BPC § 26030(f)) 
   7. The intentional and knowing sale of cannabis or cannabis products by an A-licensee to a person under 21 years of age. (BPC § 26030(g)) 
   8. The intentional and knowing sale of medicinal cannabis or medicinal cannabis products by an M-licensee to a person without a physician’s recommendation. (BPC § 26030(h)) 
   9. Failure to maintain safe conditions for inspection by the DCC. (BPC § 26030(i)) 
   10. Failure to comply with any operating procedure submitted to the DCC in the application process. (BPC § 26030(j)) 
   11. Failure to comply with license conditions established for cultivation. (BPC § 26030(k)) 
5. Authorizes the DCC to issue a citation to a licensee or unlicensed person for violating MAUCRSA or DCC regulations; authorizes administrative fines of up to $5,000 per violation by a licensee and up to $30,000 per violation by an unlicensed person; and requires the DCC in assessing a fine to give due consideration to the appropriateness of the amount of the fine with respect to factors the DCC determines to be relevant, including: (1) the gravity of the violation by the licensee or person, (2) the good faith of the licensee or person, and (3) the history of previous violations. (BPC § 26031.5(a))
6. Authorizes the DCC to suspend, revoke, place on probation with terms and conditions, or otherwise discipline licenses issued by the DCC and fine a licensee, after proper notice and hearing to the licensee, if the licensee is found to have committed any of the acts or omissions constituting grounds for disciplinary action. (BPC § 26031)
7. Establishes various civil penalties for unlicensed commercial cannabis activity, including civil penalties of up to three times the amount of the relevant license fee for each violation. (BPC § 26038(a)(1))
8. Requires the DCC, by March 1 of each year, to prepare and submit to the Legislature an annual report on the DCC’s activities, post the report on the DCC website, and include in the report specified licensing and enforcement information for the previous fiscal year. (BPC § 26200)

THIS BILL:

1. Creates the Cannabis Enforcement Accountability and Public Health Prioritization Act of 2026.
2. Defines the following:
   1. “Enforcement prioritization policy” means an enforcement framework that aligns the DCC’s regulatory oversight, investigations, inspections, and enforcement and disciplinary actions pursuant to MAUCRSA with the level of risk of harm.
   2. “Minor violation” means a technical or administrative violation of this division and applicable regulations that creates a negligible risk of harm.
   3. “Moderate violation” means a violation of MAUCRSA and applicable regulations that creates a risk of harm and includes, but is not necessarily limited to falsification of testing results, track and trace data, or required regulatory documentation.
   4. “Risk of harm” means conduct, practices, or conditions that create a reasonably foreseeable risk of significant harm to public health, public safety, environmental protection, workplace safety, or the integrity of the licensed market, including, but not limited to, any of the following: are reasonably expected to do any of the following:
      1. Interfere with enforcement of any state law.
      2. Involve false, misleading, or deceptive business practices.
      3. Adversely affect the public or environment.
   5. “Serious violation” means a violation of this division and applicable regulations that creates a serious or significant risk of harm and includes, but is not necessarily limited to, the following:
      1. Unlicensed persons engaging in the retail sale or delivery of cannabis, cannabis products, or synthetic cannabinoids to customers or children.
      2. Unlicensed persons engaging in the distribution or manufacture of synthetic cannabinoids.
      3. Unlicensed persons engaging in the cultivation or manufacture of cannabis, cannabis products, or synthetic cannabinoids where the activity results in significant degradation of water resources, public lands, or wildlife habitat.
      4. Unlicensed persons engaging in commercial cannabis activity not otherwise described in subparagraphs (A) to (C), inclusive.
      5. Licensees diverting cannabis or cannabis products to unlicensed persons.
      6. Licensees inverting cannabis or cannabis products from unlicensed persons into the licensed market.
      7. Licensees engaging in the manufacture, distribution, or sale of synthetic cannabinoids.
      8. Licensees engaging in the distribution or sales of cannabis or cannabis products to children or that are marketed or packaged in a manner attractive to children.
      9. Manufacture, distribution, or sales of cannabis or cannabis products that are adulterated or misbranded in a manner likely to cause illness or bodily injury.
      10. Degradation of water resources, public lands, or wildlife habitat.
      11. Repeated or intentional violations of laws or regulations related to workplace safety or wage protections.
3. Requires the DCC to prioritize regulatory oversight, investigations, inspections, and enforcement and disciplinary actions in a manner consistent with an enforcement prioritization policy based on the following categories, which are listed in order from highest to lowest:
   1. Serious violations.
   2. Moderate violations.
   3. Minor violations.
4. Requires the DCC to adopt and publish an enforcement prioritization policy consistent with this section that does all of the following:
   1. Ensures personnel and resources are allocated in a manner consistent with the DCC’s enforcement prioritization.
   2. Establishes risk-based enforcement categories.
   3. Provides for documentation of enforcement actions involving all violations.
5. Prohibits the DCC’s disciplinary framework or guidelines for disciplinary action from conflicting with the priorities established pursuant to the provisions of this bill.
6. Clarifies that the prioritization requirement does not limit the DCC’s authority to enforce MAUCRSA and applicable regulations.
7. Requires the DCC to include the following information in its annual report in relation to the violation severity categories established under this bill:
   1. The number and geographic distribution of investigations opened and closed.
   2. The number and geographic distribution of inspections conducted.
   3. The number and geographic distribution of enforcement actions conducted.
   4. The number and geographic distribution of court petitions filed against unlicensed persons.
   5. The number and geographic distribution of injunctions or other appropriate orders restraining unlicensed persons.
   6. The number, geographic distribution, and dollar amount of citations issued and collected against unlicensed persons.
   7. The number, geographic distribution, and dollar amount of civil penalties imposed and collected against unlicensed persons, persons aiding and abetting unlicensed commercial cannabis activity, and specified owners or managers of property used for unlicensed commercial cannabis activity.
8. Makes various legislative findings and declarations.

FISCAL EFFECT: Unknown; this bill is keyed fiscal by the Legislative Counsel.

COMMENTS:

Purpose. This bill is sponsored by the California Cannabis Operator’s Association. According to the author:

[This bill] strengthens California’s cannabis enforcement framework by directing regulators to prioritize violations that pose meaningful risks to public health, safety, and market integrity. It… requires the Department of Cannabis Control (DCC) to implement a risk-based enforcement approach that focuses resources on the most serious violations while maintaining full regulatory authority over all violations.

Background. The Medicinal and Adult Use Cannabis Regulation and Safety Act (MAUCRSA), which incorporates prior cannabis laws, authorizes a person who obtains a state license under MAUCRSA to engage in commercial adult-use cannabis activity under that license and any applicable local ordinances. The DCC is the state agency that licenses and regulates commercial cannabis activity. Specifically, the DCC regulates:

1. Growing of cannabis plants.
2. Manufacture of cannabis products.
3. Transportation and tracking of cannabis goods throughout the state.
4. Sale of cannabis goods.
5. Events where cannabis is sold or used.
6. Labeling of goods sold at retail.

Enforcement. The DCC overarching directive is to protect the public from the harms of unregulated cannabis. It does so by enforcing the requirements of MAUCRSA. To that end, its primary enforcement function is ensuring licensee compliance with licensing and other regulatory requirements. The DCC is also tasked with deterring unlicensed activity. However, because it is not a law enforcement entity, it must work with state and local law enforcement to investigate and prosecute the more severe violations in the unlicensed market.

License Discipline. As the issuer of cannabis licenses, the DCC has direct authority to regulate and take action against the holders of the license. The administrative actions the DCC can take include warnings, citations, fines, orders of abatement. It can also take formal disciplinary action of a license, including probation, suspension, and ultimately revocation. The DCC has promulgated regulations and a document titled Disciplinary Guidelines for all Commercial Cannabis Licenses (amended July 2022) to inform licensees of the process and to standardize enforcement actions and outcomes. This bill aims to incentivize the DCC to utilize its limited workload to prioritize the more severe violations.

Unlicensed Market. Regulators and stakeholders continue to raise significant concerns over cannabis operations that do business outside of the regulatory scheme. They can avoid fees and taxes while competing with lawful businesses. They also create the potential for consumer and environmental harm, avoiding testing and agricultural requirements.

Normally, licensing agencies regulate problematic licensed and unlicensed activity by imposing administrative penalties against an existing license (the strongest of which is revocation of the license), or by withholding the issuance of a license until any problems or deficiencies are addressed. However, the difficulty in regulating unlicensed businesses that do not plan to obtain a license, including unlicensed cannabis businesses, is that there is no incentive to comply with the administrative penalties because the license is irrelevant to them.

As a result, MAUCRSA includes various civil penalties that are sought in court and are not tied to the licensing process, which can be brought by the DCC, the Attorney General, or local public attorneys. There are individual penalties of up to three times the amount of the required license fee (which vary based on gross annual revenue, up to $300,000 for a microbusiness with gross annual revenue of $80,000,000). There are also civil penalties of up to $30,000 per day of operation for aiding and abetting unlicensed cannabis activity, which means a person encouraged, aided, or facilitated, the activity (not just mere knowledge of the activity). The sponsor notes that another aim of this bill is to ensure the DCC dedicates sufficient resources towards the deterrence and prosecution of unlicensed activity.

Current Related Legislation. AB 1826 (Lackey) would make various changes to the DCC’s enforcement process, including authorizing licensees to engage in a “meet and confer” with DCC staff during the enforcement process; modifying DCC enforcement procedures; modifying enforcement notice requirements; limiting the use of liability waivers during settlements between the DCC and licensees; and adding an “administrative error” category of licensee violations. AB 1826 is pending in this Committee.

ARGUMENTS IN SUPPORT:

The California Cannabis Operators Association (sponsor) writes in support:

The scale of California’s illicit market underscores the urgency of prioritizing enforcement resources where they will have the greatest impact. Recent analysis commissioned by the Department of Cannabis Control (DCC) indicates that the majority of cannabis consumed in California is still supplied by the illicit market.

In the California Cannabis Market Outlook, researchers estimate that only about 40% of cannabis consumed in California is supplied through the licensed market, while roughly 60% remains attributable to illicit production and sales. Of the approximately 3.8 million pounds of

cannabis consumed annually in the state, only about 1.4 million pounds move through the licensed supply chain, leaving roughly 2.4 million pounds outside the regulated system.1

This dynamic creates significant risks for public health, consumer safety, environmental compliance, and the viability of licensed businesses operating under California’s rigorous regulatory framework.

At the same time, licensed operators across the state have reported increasing concern regarding the allocation of enforcement resources. Over the past year, many operators have experienced enforcement actions, often referred to by the Department as “compliance actions,” that appear focused on minor or highly technical compliance issues, including the reopening of previously resolved matters, notices issued weeks after inspections that initially yielded no violations, and corrective actions based on factual inaccuracies or inconsequential administrative issues. Addressing these matters often requires substantial time and financial resources for businesses already operating under significant financial strain.

In May 2025, a broad coalition representing a majority of California’s licensed cannabis operators formally raised these concerns in correspondence to the DCC, urging the Department to reassess its compliance and enforcement strategies and refocus resources on the most pressing threats to public health and market integrity. These threats include diversion into and from the legal market, product safety and testing compliance, unlawful sales to minors, and illegal retail activity that undermines the state’s regulated supply chain and associated tax revenue. When enforcement resources are finite, clear statutory direction regarding enforcement priorities becomes essential.

ARGUMENTS IN OPPOSITION:

There is no opposition on file.

POLICY ISSUES FOR CONSIDERATION:

Violation Priorities. This bill categorizes violations in order of priority and risk of harm. However, there may be differences of opinion as to how the violations should be categorized. In addition, the interaction between these priorities and the violations listed as “grounds for discipline,” to the extent that list is also intended to express priority under Proposition 64, may need to be clarified or reconciled. If this bill passes this Committee, the author and sponsor may wish to continue to work with interested parties to verify consensus on the categorization and interaction with existing laws.

IMPLEMENTATION ISSUES:

Drafting Clean-Up. The April 9, 2026, author’s amendments updated the bill’s structure and terminology to better align with the DCC’s current regulations and disciplinary guidelines. Additional technical changes are needed to address syntax and terminology issues. Clarifying changes are recommended under the Amendments section of this analysis to address some of those issues.

AMENDMENTS:

1. To resolve circular definitions, address a severity mismatch with violations involving falsification, provide additional examples of a moderate violation, address the syntax issues in the definition of risk of harm related to conduct and conditions, combine the various examples of unlicensed activity into the catch-all, and reinforce the distinctions between negligence, repeated acts, and recklessness, and make other conforming and technical changes, amend the bill as follows:

On pages 3-5, lines 37 to 7:

(2) “Minor violation” means a technical or administrative violation of conduct or conditions prohibited by this division and applicable regulations that creates create a negligible risk of harm. harm, including, but not limited to, technical or administrative violations.

(3) “Moderate violation” means a violation of conduct or conditions prohibited by this division and applicable regulations that creates create a risk of harm and includes, but is not necessarily harm, including, but not limited to, the following:

(A) Falsification of Negligent failure to maintain accurate testing results, track and trace data, or required regulatory documentation.

(B) Negligent violation of laws related to workplace safety or wage protection.

(C) Manufacture, distribution, or sales of cannabis or cannabis products that are adulterated or misbranded in a manner unlikely to cause illness or bodily injury.

(4) “Risk of harm” means conduct, practices, or conditions that are reasonably expected to do the likelihood of any of the following:

(A) Interfere Interference with enforcement of any state law.

(B) Involve false, False, misleading, or deceptive business practices.

(C) Adversely affect the public or environment. affecting the environment or the health, safety, or welfare of the public.

(5) “Serious violation” means a violation of conduct or conditions prohibited by this division and applicable regulations that creates create a serious or significant risk of harm and includes, but is not necessarily harm, including, but not limited to, the following:

(A) Unlicensed persons engaging in the retail sale or delivery of cannabis, cannabis products, or synthetic cannabinoids to customers or children.

(B) Unlicensed persons engaging in the distribution or manufacture of synthetic cannabinoids.

(C) Unlicensed persons engaging in the cultivation or manufacture of cannabis, cannabis products, or synthetic cannabinoids where the activity results in significant degradation of water resources, public lands, or wildlife habitat.

(D)(A) Unlicensed persons engaging in commercial cannabis activity. activity not otherwise described in subparagraphs (A) to (C), inclusive.

(E)(B) Licensees diverting cannabis or cannabis products to unlicensed persons.

(F)(C) Licensees inverting cannabis or cannabis products from unlicensed persons into the licensed market.

(G)(D) Licensees engaging in the manufacture, distribution, or sale of synthetic cannabinoids.

(H)(E) Licensees engaging in the distribution or sales of cannabis or cannabis products to children or that are marketed or packaged in a manner attractive to children.

(I)(F) Manufacture, distribution, or sales of cannabis or cannabis products that are adulterated or misbranded in a manner likely to cause illness or bodily injury.

(J)(G) Degradation of water resources, public lands, or wildlife habitat.

(H) Reckless or repeated failure to maintain accurate testing results, track and trace data, or required regulatory documentation.

(K)(I) Repeated or intentional violations of laws or regulations Reckless or repeated violation of laws related to workplace safety or wage protections.

1. Technical and conforming changes to the prioritization policy requirement:

(c) (1) In implementing this chapter, the department shall prioritize regulatory oversight, investigations, inspections, and enforcement and disciplinary actions in a manner consistent with an enforcement prioritization policy based on the following categories, which are listed in order from highest to lowest level of risk of harm: priority:

(1) (A) Serious violations.

(2) (B) Moderate violations.

(3) (C) Minor violations.

(d) (2) The department shall adopt and publish an enforcement prioritization policy consistent with this to implement this section that does does, but is not limited to, all of the following:

(1) (A) Ensures personnel and resources are allocated in a manner consistent with subdivision (c). the priority of violations in paragraph (1).

(2) (B) Establishes the enforcement and disciplinary actions for each category of violation in paragraph (1). risk-based enforcement categories.

(3) (C) Provides for documentation of enforcement actions involving all violations.

(e) (d) The department’s disciplinary framework or guidelines for disciplinary action shall not conflict with this section.

(f) (e) This section does not limit the department’s authority to enforce this division and applicable regulations.

REGISTERED SUPPORT:

California Cannabis Operators Association (sponsor)

California Cannabis Industry Association

Catalyst

Cannabis Distribution Association

CannaCraft

Catalyst Cannabis Co.

Good Farmers Great Neighbors

Kiva Brands

March and Ash

Mammoth

Nug

United Cannabis Business Association

REGISTERED OPPOSITION:

There is no opposition on file.

Analysis Prepared by: Vincent Chee / B. & P. / (916) 319-3301