AB 1435

Bill Subjects

Abstract

Existing law, the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) , provides for the licensure and regulation of commercial cannabis activity. MAUCRSA prohibits the manufacture, sale, delivery, holding, or offering for sale of a cannabis product that is adulterated and defines "adulteration" for this purpose. This bill would impose testing and labeling requirements on products that are, or contain, one or more psychoactive or nonpsychoactive cannabinoids that are derived from a plant that is not cannabis, referred to as noncannabis cannabinoids or NCCs. The bill would require the State Department of Public Health to review each noncannabis cannabinoid in use in products for sale in the state to determine whether the NCC is psychoactive and to determine the safety and efficacy of the substance. The bill would require the department to publish a list that categorizes NCCs as approved psychoactive, approved, nonpsychoactive, or not approved, as specified. Existing law imposes an excise tax upon purchasers of cannabis or cannabis products sold in this state at the rate of 15% of the average market price of any retail sale by a cannabis retailer, and a separate cultivation tax on harvested cannabis that enters the commercial market, as specified. Under existing law, those taxes are administered by the California Department of Tax and Fee Administration and are deposited into the California Cannabis Tax Fund, which is continuously appropriated for specified purposes, including youth, education, prevention, and early intervention and treatment services, environmental restoration and protection, and law enforcement, pursuant to a specified schedule. This bill would impose an excise tax upon purchasers of noncannabis cannabinoids sold in this state at the rate of $0.01 per milligram of NCC and would prohibit noncannabis cannabinoids from being sold to a purchaser unless the excise tax is paid by the purchaser at the time of sale. The bill would require a manufacturer to report and remit the excise tax to the department, as provided, and to collect the tax from the retailer. The bill would establish the Noncannabis Cannabinoid Tax Fund and would require revenues from the excise tax on NCCs to be deposited into that fund. The bill would continuously appropriate the moneys in the fund for specified purposes, including youth, education, prevention, and early intervention and treatment services, environmental restoration and protection, and social justice and equity programs, pursuant to a specified schedule. By creating a continuously appropriated fund, the bill would make an appropriation. This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature. This bill would take effect immediately as a tax levy, but its operative date would depend on its effective date.