Bill Text: CA AB1027 | 2025-2026 | Regular Session | Amended

California Assembly Bill 1027

Bill Title: Cannabis: testing: quality assurance.

Sponsorship: Bipartisan Bill

Status: (Engrossed) 2025-08-29 - In committee: Held under submission. [AB1027 Detail]

Download: California-2025-AB1027-Amended.html

Amended IN Senate June 18, 2025

Amended IN Assembly March 28, 2025

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Assembly Bill

No. 1027

Introduced by Assembly Member Sharp-Collins
(Coauthor: Assembly Member Hadwick)

February 20, 2025

An act to amend Sections 26039.3, 26070, 26100, 26104, and 26110 of the Business and Professions Code, relating to cannabis.

LEGISLATIVE COUNSEL'S DIGEST

AB 1027, as amended, Sharp-Collins. Cannabis: testing: quality assurance.

(1) Existing law, the Control, Regulate and Tax Adult Use of Marijuana Act (AUMA), an initiative measure, authorizes a person who obtains a state license under AUMA and any applicable local ordinances to engage in commercial adult-use cannabis activity pursuant to that license, if conducted as prescribed. 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, and requires the Department of Cannabis Control to administer its provisions.

Existing law prohibits cannabis or cannabis products from being sold by a licensee unless specified quality assurance standards and testing standards are met. Existing law requires representative samples of the cannabis or cannabis products in their final form to be tested by a licensed testing laboratory, and requires the department to develop criteria to determine which batches are tested. Existing law authorizes the testing laboratory to retest a sample if the testing laboratory notifies the department, in writing, that the test was compromised due to equipment malfunction, staff error, or another circumstance authorized by the department, and the department authorizes the retest of that sample. Existing law requires the testing laboratory to issue a certificate of analysis that the cannabis batch has passed the testing requirements, and authorizes the testing laboratory to amend the certificate of analysis to correct minor errors, as specified.

This bill would specify that all cannabis or cannabis products are subject to test or retest, and would revise the retest requirements to instead authorize a testing laboratory to retest a sample of cannabis or cannabis products if either the testing laboratory notifies the department, in writing, that the test was compromised due to equipment ~~malfunction or~~ malfunction, staff error, or other circumstances allowed by regulation, if the department requires the retest, or if the department authorizes the request.

This bill would require the licensee to allow the department to obtain or access any cannabis or cannabis products held or offered for retail sale for the purposes of conducting off-the-shelf laboratory testing. The bill would also require a retailer and any other licensee authorized to engage in the retail sale of cannabis or cannabis products to provide the certificate of analysis associated with any cannabis or cannabis product held or offered for retail sale to a customer upon request.

This bill would also require a testing laboratory to be subject to ~~blind proficiency testing~~ performance testing, as specified, to ensure consistency of results across laboratories.

(2) Existing law, upon the issuance of a certificate of analysis by the testing laboratory, requires a distributor to conduct a quality assurance review before distribution of cannabis or cannabis products to ensure the labeling and packaging conform to the requirements of MAUCRSA. Existing law also requires a quality assurance compliance monitor, who is an employee or contractor of the department, to 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 MAUCRSA.

This bill, beginning on March 1, 2026, would additionally require the distributor’s quality assurance review of each batch of cannabis or cannabis products to be properly recorded within the track and trace system. The bill would repeal the requirement that a quality assurance compliance monitor conduct random quality assurance reviews, and instead would require the department to conduct those reviews. The bill would expand those reviews to include a microbusiness or retailer’s licensed premises, and would require the department to additionally ensure the testing of the cannabis and cannabis products conform to the requirements of MAUCRSA.

(3) Existing law authorizes a testing laboratory to receive and test samples of cannabis or cannabis products from state or local law enforcement, or a prosecuting or regulatory agency, as specified, and provides that the testing of that cannabis is not commercial cannabis activity for purposes of MAUCRSA and is not arranged or overseen by the department.

This bill would require a licensed testing laboratory to comply with the department’s request to evaluate the laboratory’s testing practice.

(4) Existing law, if the department finds or has probable cause to believe that cannabis or a cannabis product is adulterated or misbranded, or sold in violation of MAUCRSA, requires the department to affix a tag or other appropriate marking to the cannabis or cannabis product, and to give notice that the cannabis or cannabis product is in violation of MAUCRSA and has been embargoed. Existing law makes it unlawful to remove, sell, or dispose of embargoed cannabis or an embargoed cannabis product without written permission of the department or a court, and subjects each violation to a fine.

This bill would remove the requirement that the department affix a tag or other appropriate marking to the cannabis or cannabis product, and instead would require the notice to reasonably identify the cannabis or cannabis product subject to the embargo. The bill would also require the licensee, within one business day of receiving a notice of the embargo, to physically separate all embargoed cannabis and cannabis products from all other inventory, as specified.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

Section 26039.3 of the Business and Professions Code is amended to read:

26039.3.

(a) If the department finds or has probable cause to believe that cannabis or a cannabis product is adulterated or misbranded within the meaning of this division, or the sale of the cannabis or cannabis product would be in violation of this division, the department shall give notice in writing or electronically that the cannabis or cannabis product is, or is suspected of being, adulterated or misbranded, or the sale of the cannabis or cannabis product would be in violation of this division and has been embargoed and that the cannabis or cannabis product shall not be removed or disposed of by sale or otherwise until permission for removal or disposal is given by the department or a court. The notice shall reasonably identify the cannabis or cannabis product subject to the embargo.

(b) (1) Within one business day of receiving a notice of embargo from the department, the licensee shall physically separate all embargoed cannabis and cannabis products from all other inventory and place the embargoed cannabis or cannabis products in a limited access area on the licensed premises until the licensee receives further instruction from the department.

(2) It is unlawful to remove, sell, or dispose of embargoed cannabis or an embargoed cannabis product without written permission of the department or a court. The removal, sale, or disposal of each item of embargoed cannabis or cannabis product without written permission of the department constitutes a violation of this subdivision. A violation of this subdivision is subject to a citation and fine of not more than ten thousand dollars ($10,000).

(3) Notwithstanding paragraph (2), a licensed cultivator may request permission for the continued cultivation or harvesting of the cannabis subject to embargo. The department may authorize, and may impose conditions on, the continued cultivation or harvesting of the cannabis subject to embargo.

(c) If the adulteration or misbranding can be corrected by proper labeling or additional processing of the cannabis or cannabis product and all of the provisions of this division can be complied with, the licensee may request that the department remove the tag or other marking to permit correction. If, under the supervision of the department, the adulteration or misbranding has been corrected, the department may remove the tag or other marking. Cannabis and cannabis products found at an unlicensed location, or cultivated, processed, produced, or manufactured at an unlicensed location, or derived from an unlicensed source, cannot be corrected and shall be destroyed.

(d) If the department finds that cannabis or a cannabis product that is embargoed is not adulterated or misbranded, or that its sale is not otherwise in violation of this division, the department may remove the tag or other marking.

(e) The cannabis or cannabis product may be destroyed by the licensee or product owner pursuant to a corrective action plan approved by the department and under the supervision of the department. The cannabis or cannabis product shall be destroyed at the expense of the licensee or product owner.

(f) The department may condemn cannabis or a cannabis product under the provisions of this section. A proceeding for condemnation shall be subject to appropriate notice to, and the opportunity for a hearing with regard to, the person or licensee affected in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

(1) Upon a finding by the administrative law judge that the cannabis or cannabis product is adulterated or misbranded, or that its sale is otherwise in violation of this division, the administrative law judge may direct the cannabis or cannabis product to be destroyed at the expense of the licensee or product owner and under the supervision of the department. The licensee or owner of the affected cannabis or cannabis product shall pay fees and reasonable costs, including the costs of storage, testing, and supervision, incurred by the department in investigating and prosecuting the action taken pursuant to this section.

(2) Upon a finding by the administrative law judge that the adulteration or misbranding can be corrected by proper labeling or additional processing of the cannabis or cannabis product and that all provisions of this division can be complied with, the administrative law judge may direct the cannabis or cannabis products to be brought into compliance under the department’s supervision. The licensee shall pay fees and reasonable costs, including the costs of storage, testing, and supervision, incurred by the department in investigating and prosecuting the action. After the costs, fees, and expenses have been paid, the department may release the embargo and remove the tag or other marking and supervise the corrective action.

SEC. 2.

Section 26070 of the Business and Professions Code is amended to read:

26070.

(a) State licenses to be issued by the department related to the sale and distribution of cannabis and cannabis products are as follows:

(1) A retailer shall have a licensed premises which is a physical location from which commercial cannabis activities are conducted. A retailer’s premises may be closed to the public. A retailer may conduct sales exclusively by delivery.

(2) A distributor licensee shall be bonded and insured at a minimum level established by the department.

(3) (A) Microbusiness or combined activities licenses that authorize cultivation of cannabis shall include the license conditions described in subdivision (b) of Section 26060.1.

(B) The department shall establish a process by which an applicant for a microbusiness or combined activities license can demonstrate compliance with all the requirements under this division for the activities that will be conducted under the license.

(b) The department shall establish minimum security and transportation safety requirements for the commercial distribution and delivery of cannabis and cannabis products. Except as provided in subdivision (d) of Section 26110, the transportation of cannabis and cannabis products shall only be conducted by licensed persons authorized to engage in distribution under this division or employees of those persons. Transportation safety standards established by the department shall include, but not be limited to, minimum standards governing the types of vehicles in which cannabis and cannabis products may be distributed and delivered and minimum qualifications for persons eligible to operate such vehicles.

(c) The driver of a vehicle transporting or transferring cannabis or cannabis products shall be directly employed by a licensee authorized to transport or transfer cannabis or cannabis products.

(d) Notwithstanding any other law, all vehicles transporting cannabis and cannabis products for hire shall be required to have a valid motor carrier permit pursuant to Chapter 2 (commencing with Section 34620) of Division 14.85 of the Vehicle Code. The Department of the California Highway Patrol shall have authority over the safe operation of these vehicles, including, but not limited to, requiring licensees engaged in the transportation of cannabis or cannabis products to participate in the Basic Inspection of Terminals (BIT) program pursuant to Section 34501.12 of the Vehicle Code.

(e) Prior to transporting cannabis or cannabis products, a licensed distributor shall do both of the following:

(1) Complete an electronic shipping manifest as prescribed by the department. The shipping manifest shall include the unique identifier, pursuant to Section 26067, issued by the department for the cannabis product.

(2) Securely transmit the manifest to the department and the licensee that will receive the cannabis product.

(f) During transportation, the licensed distributor shall maintain a physical copy of the shipping manifest and make it available upon request to agents of the department and law enforcement officers.

(g) The licensee receiving the shipment shall maintain each electronic shipping manifest and shall make it available upon request to the department and any law enforcement officers.

(h) Upon receipt of the transported shipment, the licensee receiving the shipment shall submit to the department a record verifying receipt of the shipment and the details of the shipment.

(i) Transporting, or arranging for or facilitating the transport of, cannabis or cannabis products in violation of this chapter is grounds for disciplinary action against the license.

(j) Licensed retailers, microbusinesses, and combined activities, and licensed nonprofits under Section 26070.5, shall implement security measures reasonably designed to prevent unauthorized entrance into areas containing cannabis or cannabis products and theft of cannabis or cannabis products from the premises. These security measures shall include, but not be limited to, all of the following:

(1) Prohibiting individuals from remaining on the licensee’s premises if they are not engaging in activity expressly related to the operations of the retailer.

(2) Establishing limited access areas accessible only to authorized personnel.

(3) Other than limited amounts of cannabis used for display purposes, samples, or immediate sale, storing all finished cannabis and cannabis products in a secured and locked room, safe, or vault, and in a manner reasonably designed to prevent diversion, theft, and loss.

(k) A retailer shall notify the department and the appropriate law enforcement authorities within 24 hours after discovering any of the following:

(1) Significant discrepancies identified during inventory. The level of significance shall be determined by the department.

(2) Diversion, theft, loss, or any criminal activity pertaining to the operation of the retailer.

(3) Diversion, theft, loss, or any criminal activity by any agent or employee of the retailer pertaining to the operation of the retailer.

(4) The loss or unauthorized alteration of records related to cannabis or cannabis products, registered qualifying patients, primary caregivers, or retailer employees or agents.

(5) Any other breach of security.

(l) A retailer and any other licensee authorized to engage in the retail sale of cannabis or cannabis products shall provide the certificate of analysis associated with any cannabis or cannabis product held or offered for retail sale to a customer upon request of the customer or the department.

(m) A retailer and any other licensee authorized to engage in the retail sale of cannabis or cannabis products shall allow the department to obtain or access any cannabis or cannabis products held or offered for retail sale for the purposes of conducting off-the-shelf laboratory testing in compliance with this division or the department’s regulations.

SEC. 3.

Section 26100 of the Business and Professions Code is amended to read:

26100.

(a) Except as otherwise provided by law, cannabis or cannabis products shall not be sold pursuant to a license provided for under this division unless a representative sample of the cannabis or cannabis products has been tested by a licensed testing laboratory.

(b) The department shall develop criteria to determine which batches shall be tested or retested. All testing of the samples shall be performed on the final form in which the cannabis or cannabis product will be consumed or used.

(c) Testing of batches to meet the requirements of this division shall only be conducted by a licensed testing laboratory.

(d) For each batch tested, the testing laboratory shall issue a certificate of analysis for selected lots at a frequency determined by the department with supporting data, to report both of the following:

(1) Whether the chemical profile of the sample conforms to the labeled content of compounds, including, but not limited to, all of the following, unless limited through regulation by the department:

(A) Tetrahydrocannabinol (THC).

(B) Tetrahydrocannabinolic Acid (THCA).

(D) Cannabidiolic Acid (CBDA).

(E) The terpenes required by the department in regulation.

(F) Cannabigerol (CBG).

(G) Cannabinol (CBN).

(H) Other compounds or contaminants required by the department.

(2) That the presence of contaminants does not exceed the levels established by the department. In establishing the levels, the department shall consider the American Herbal Pharmacopoeia monograph, guidelines set by the Department of Pesticide Regulation pursuant to subdivision (c) of Section 26060, and any other relevant sources. For purposes of this paragraph, “contaminants” includes, but is not limited to, all of the following:

(A) Residual solvent or processing chemicals.

(B) Foreign material, including, but not limited to, hair, insects, or similar or related adulterant.

(3) For edible cannabis products, that the milligrams per serving of THC does not exceed 10 milligrams per serving, plus or minus 12 percent. After January 1, 2022, the milligrams of THC per serving shall not deviate from 10 milligrams by more than 10 percent.

(4) Notwithstanding paragraph (3), the department shall establish regulations to adjust testing variances for edible cannabis products that include less than five milligrams of THC in total.

(e) A testing laboratory may amend a certificate of analysis to correct minor errors, as defined by the department.

(f) (1) Standards for residual levels of volatile organic compounds shall be established by the department.

(2) On or before January 1, 2023, the department shall establish a standard cannabinoids test method, including standardized operating procedures, that shall be utilized by all testing laboratories. The department may establish more than one method for use by testing laboratories and these standards may be developed through a reference laboratory.

(g) The testing laboratory shall conduct all testing required by this section in a manner consistent with general requirements for the competence of testing and calibrations activities, including sampling and using verified methods.

(h) All testing laboratories performing tests pursuant to this section shall obtain and maintain ISO/IEC 17025 accreditation as required by the department in regulation.

(i) (1) The testing laboratory may be subject to ~~blind proficiency~~ performance testing by the department to ensure consistency of results across ~~laboratories, subject to appropriation by the Legislature.~~ laboratories.

(2) For purposes of this subdivision, “performance testing” may include, but is not limited to, blind proficiency testing, round robin testing, and any other type of programs that may be used to demonstrate competent performance of a test laboratory.

(j) (1) If a test result falls outside the specifications authorized by law or regulation, the testing laboratory shall follow a standard operating procedure to confirm or refute the original result.

(2) If a test result falls outside the specifications authorized by law or regulation, the testing laboratory may retest the sample if either of the following occur:

(A) The testing laboratory notifies the department, in writing, that the test was compromised due to equipment ~~malfunction or~~ malfunction, staff error, or other circumstances allowed by regulation, or if retesting is required by the department.

(B) The department authorizes the testing laboratory to retest the sample.

(k) A testing laboratory shall destroy the remains of the sample of cannabis or cannabis product upon completion of the analysis, as determined by the department through regulations.

(l) Presale inspection, testing transfer, or transportation of cannabis or cannabis products pursuant to this section shall conform to a specified chain of custody protocol and any other requirements imposed under this division.

(m) This division 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. This division also does not prohibit a licensee from performing testing on the licensee’s premises of cannabis or cannabis products obtained from another licensee. Onsite testing by the licensee shall not be certified by the department and does not exempt the licensee from the requirements of compliance testing at a testing laboratory pursuant to this section.

SEC. 4.

Section 26104 of the Business and Professions Code is amended to read:

26104.

(a) A licensed testing laboratory shall, in performing activities concerning cannabis and cannabis products, comply with the requirements and restrictions set forth in applicable law and regulations.

(b) The department shall develop procedures to do all of the following:

(1) Ensure that testing of cannabis and cannabis products occurs prior to distribution to retailers, microbusinesses, or nonprofits licensed under Section 26070.5.

(2) Specify how often licensees shall test cannabis and cannabis products, and that the cost of testing cannabis shall be borne by the licensed cultivators and the cost of testing cannabis products shall be borne by the licensed manufacturer, and that the costs of testing cannabis and cannabis products shall be borne by a nonprofit licensed under Section 26070.5.

(3) Require destruction of harvested batches whose testing samples indicate noncompliance with health and safety standards required by the department, unless remedial measures can bring the cannabis or cannabis products into compliance with quality assurance standards as specified by law and implemented by the department.

(4) Ensure that a testing laboratory employee takes the sample of cannabis or cannabis products from the distributor’s premises for testing required by this division and that the testing laboratory employee transports the sample to the testing laboratory. The driver transporting the sample pursuant to this requirement shall be directly employed by the testing laboratory.

(c) (1) Except as provided in this division, a testing laboratory shall not acquire or receive cannabis or cannabis products except from a licensee in accordance with this division, and shall not distribute, sell, or dispense cannabis or cannabis products, from the licensed premises from which the cannabis or cannabis products were acquired or received. All transfer or transportation shall be performed pursuant to a specified chain of custody protocol.

(2) A testing laboratory may receive and test samples of cannabis or cannabis products from a state or local law enforcement, or a prosecuting or regulatory agency in order to test the cannabis or cannabis products. For purposes of this section, testing conducted by a testing laboratory for state or local law enforcement, a prosecuting agency, or a regulatory agency is not commercial cannabis activity. A licensed testing laboratory shall comply with the department’s request to evaluate the laboratory’s testing practices, as determined in department regulations.

(d) A testing laboratory may receive and test samples of cannabis or cannabis products from a licensed manufacturer or licensed cultivator for quality control purposes. A testing laboratory shall not certify samples from a licensed manufacturer or licensed cultivator for retail sale. All tests performed by a testing laboratory for a licensed manufacturer or licensed cultivator shall be recorded with the name of the licensee and the amount of cannabis or cannabis product received.

(e) A testing laboratory may receive and test samples of cannabis or cannabis products from a qualified patient or primary caregiver with a valid physician’s recommendation for cannabis for medicinal purposes. A testing laboratory shall not certify samples from a qualified patient or primary caregiver for resale or transfer to another person or licensee. All tests performed by a testing laboratory for a qualified patient or primary caregiver shall be recorded with the name of the qualified patient or primary caregiver and the amount of cannabis or cannabis product received.

(f) A testing laboratory may receive and test samples of cannabis or cannabis products from a person over 21 years of age when the cannabis has been grown by that person and will be used solely for that person’s use, as authorized pursuant to Section 11362.1 of the Health and Safety Code. A testing laboratory shall not certify samples from the person over 21 years of age for resale or transfer to another person or licensee. All tests recorded pursuant to this subdivision shall be recorded with the name of the person submitting the sample and the amount of cannabis or cannabis product received.

SEC. 5.

Section 26110 of the Business and Professions Code is amended to read:

26110.

(a) Cannabis 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 and cannabis products.

(c) The distributor shall store, as determined by the department, the cannabis batches on the premises of the distributor before testing and continuously until either of the following occurs:

(1) The cannabis batch passes the testing requirements pursuant to this division and is transported to a licensed retailer or to another licensed distributor.

(2) The cannabis 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) The distributor shall arrange for a testing laboratory to obtain a representative sample of each cannabis 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.

(e) ~~(1)~~Upon issuance of a certificate of analysis by the testing laboratory that the cannabis 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.

(2)Beginning March 1, 2026, the distributor’s quality assurance review of each batch of cannabis or cannabis products shall be properly recorded within the track and trace system, as required by the department.

(f) (1) The department shall conduct random quality assurance reviews at a distributor, microbusiness, or retailer’s licensed premises to ensure the labeling, packaging, and testing of the cannabis and cannabis products conform to the requirements of this division.

(2) The department may collect representative samples of cannabis and cannabis products for additional or independent testing. The department may also order the retesting of cannabis and cannabis products held under embargo pursuant to Section 26039.3. Retesting by order of the department shall be conducted by any licensed testing laboratory selected by the department.

(g) 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.

(h) 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.

(i) 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.

(j) 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.