California became the first state to allow medicinal cannabis use when voters passed the Compassionate Use Act in 1996. Today, cannabis is legal in California for both medicinal and adult (recreational) use.

The cannabis industry is strictly regulated to make sure:

• Businesses operate safely
• Products are contaminant-free and labeled to inform purchasers
• Cannabis is kept away from children

Statutes, regulations and ordinances are all types of laws that work together to set rules for businesses and consumers.

What are statutes, regulations and ordinances?

• Statutes are laws written and passed by the state legislature, and signed into law by the Governor. They apply to the whole state and create basic rules that apply to everyone in the state.
• Regulations are rules created by a state agency that interpret the statute and make it more specific. Like statutes, regulations also apply to the whole state. The Department of Cannabis Control (DCC) creates regulations that apply to cannabis businesses.
• Ordinances are rules created by cities and counties to set even more specific rules for the local community. They set the time, place and manner a business can operate or a resident can take certain actions. An ordinance only applies in the city or county that created it. Ordinances can be more specific than statutes or regulations, but they cannot work against them. Check with your city and county to find out if they have passed any ordinances for cannabis.

Statutes

The main statute for cannabis businesses is in the Business and Professions Code. It is called the Medicinal and Adult Use Cannabis Regulation and Safety Act (MAUCRSA). MAUCRSA sets up a basic framework for licensing, oversight and enforcement related to cannabis businesses.

In addition to cannabis-specific laws, cannabis businesses also have to follow the same rules that other businesses in California must follow. For example, there are rules in the statutes about waste disposal, protecting the environment, vehicle registration and paying taxes.

There are also statutes that set rules for people using cannabis in California. The Health and Safety Code has a section on cannabis with:

• Rules to prevent people under age 21 from getting cannabis
• Limits on how much cannabis a person can carry at a time
• Requirements for medical cannabis

Regulations

If you run, work for or want to start a cannabis business, it’s important that you understand DCC’s regulations.

We have resources to help you understand the requirements:

• License application requirements
• Types of cannabis license
• Packaging and labeling requirements
• Track and Trace system

DCC regulations

DCC makes regulations for cannabis businesses. These regulations specify:

• What you must submit when applying for a license
• Rules for running a cannabis business
• What can and cannot be made into a cannabis product, and what ingredients can and cannot be used
• Packaging requirements to prevent contamination and inform consumers about what’s inside
• The testing that each product must pass before it can be sold
• Enforcement actions that may be taken if a business is not following the rules

Equity ordinances

Some cities and counties in California have ordinances for equity programs to help people negatively affected by the War on Drugs and create a more inclusive marketplace. Each ordinance supports equity applicants in different ways, such as:

• Faster application processes
• Assistance during the licensing process
• Help with operating your business
• Direct financial support

Equity ordinances approved by local jurisdictions

• County of Humboldt – Ordinance No. 2623
• City of Coachella – Resolution No. 2019-15
• City of Rio Dell – Ordinance No. 375-2019
• City of Long Beach – Ordinance No. ORD-18-0015
• City of Los Angeles – City of Los Angeles Municipal Code, Ch. 10, Art. 4, Sec. 104.20
• City of Oakland – Ordinance No. 13504
• City of Sacramento – Resolution No. 2018-0323
• City and County of San Francisco – City and County of San Francisco Police Code, Art. 16, Sec. 1604
• City of San Jose – Ordinance No. 30234

Contact your city or county office to learn more about their equity program.

Resources for advocating for social equity in your city or county

• Equity grant funding for local jurisdictions
• Minority Cannabis Business Association’s top 10 model ordinances