California § 26110 - Cannabis and cannabis product batches are subject to quality assurance standards

§ 26110. Cannabis and cannabis product batches are subject to quality assurance standards

(a) Cannabis and cannabis product batches are subject to quality assurance standards and testing prior to sale at a retailer, microbusiness, or nonprofit licensed under Section 26070.5, except for immature cannabis plants and seeds, as provided for in this division. (b) A licensee that holds a valid distributor license may act as the distributor for the licensee’s cannabis, industrial hemp, and cannabis products. (c) The distributor shall store, as determined by the department, the cannabis and cannabis product batches on the premises of the distributor before testing and continuously until either of the following occurs: (1) The batch passes the testing requirements pursuant to this division and is transported to a licensed retailer or to another licensed distributor. (2) The batch fails the testing requirements pursuant to this division and is destroyed or transported to a manufacturer for remediation as allowed by the department. (d) Industrial hemp is subject to quality assurance standards and testing upon entry into the licensed market. The distributor shall store each batch of industrial hemp until either of the following occurs: (1) The batch passes the testing requirements pursuant to this division and is transported to a licensed manufacturer or to another licensed distributor. (2) The batch fails the testing requirements pursuant to this division and is destroyed. (e) The distributor shall arrange for a testing laboratory to obtain a representative sample of each cannabis, industrial hemp, and cannabis product batch at the distributor’s licensed premises. After obtaining the sample, the testing laboratory representative shall maintain custody of the sample and transport it to the testing laboratory. (f) Upon issuance of a certificate of analysis by the testing laboratory that the cannabis and cannabis product batch has passed the testing requirements pursuant to this division, the distributor shall conduct a quality assurance review before distribution to ensure the labeling and packaging of the cannabis and cannabis products conform to the requirements of this division. (g) (1) There shall be a quality assurance compliance monitor who is an employee or contractor of the department and who shall not hold a license in any category or own or have an ownership interest in a licensee or the premises of a licensee. (2) The quality assurance compliance monitor shall conduct random quality assurance reviews at a distributor’s licensed premises before distribution to ensure the labeling and packaging of the cannabis and cannabis products conform to the requirements of this division. (3) The quality assurance compliance monitor shall have access to all records and test results required of a licensee by law in order to conduct quality assurance analysis and to confirm test results. All records of inspection and verification by the quality assurance compliance monitor shall be provided to the department. Failure to comply shall be noted by the quality assurance compliance monitor for further investigation. Violations shall be reported to the department. The quality assurance compliance monitor shall also verify the tax payments collected and paid under Sections 34011 and 34012 of the Revenue and Taxation Code are accurate. The monitor shall also have access to the inputs and assumptions in the track and trace system and shall be able to verify their accuracy and that they are commensurate with the tax payments. (h) After testing, all cannabis and cannabis products fit for sale may be transported only from the distributor’s premises to the premises of another licensed distributor for further distribution, or to a licensed retailer, microbusiness, or nonprofit for retail sale. (i) A licensee is not required to sell cannabis or cannabis products to a distributor and may directly contract for sale with a licensee authorized to sell cannabis and cannabis products to purchasers. (j) A distributor performing services pursuant to this section may collect a fee from the licensee for the services provided. The fee may include, but is not limited to, the costs incurred for laboratory testing. A distributor may also collect applicable state or local taxes and fees. (k) This section does not prohibit a licensee from performing testing on the licensee’s premises for the purposes of quality control of the product in conjunction with reasonable business operations. The testing conducted on the licensee’s premises by the licensee does not meet the testing requirements pursuant to this division.