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Assembly committee advances bill to hold online marketplaces accountable for illicit intoxicating hemp and unlicensed cannabis sales
Summary
Senate Bill 378 would allow consumers to seek civil penalties against online marketplaces that advertise illegal intoxicating hemp and unlicensed cannabis products. Supporters cited public‑health risks and damage to licensed cannabis businesses; opponents warned the bill is overbroad, could chill legal commerce and raised constitutional concerns.
Senate Bill 378, which would create new responsibilities and potential civil liability for online marketplaces that advertise or facilitate sales of illicit intoxicating hemp and unlicensed cannabis products, was advanced to the Assembly Appropriations Committee after extended testimony and negotiation.
The bill’s author said she planned to remove references to industrial hemp from the measure and to consider an affirmative defense for platforms acting in good faith to comply with the law. The author told the committee she is working to narrow strict liability concerns and address standing questions raised in prior hearings.
Why it matters: Supporters described unregulated online sales of illicit or high‑potency hemp and cannabis products that are not safety‑tested, are often mislabeled and can reach children. UFCW legislative director Kristen Heidelbach cited a study and emergency regulations that, she said, make “any intoxicating hemp product … illegal here in California” and urged passage to protect licensed industry jobs and public safety.
Licensed cannabis industry representatives including Tiffany Devitt said online availability of illicit and high‑potency products has driven businesses to close, reduced tax and licensing revenue, and posed health risks: a study they cited found 91% of purchased products didn’t charge required taxes and 95% contained synthetics.
Opponents said the bill as drafted would be overbroad and could sweep in lawful hemp wellness products, search engines, mapping services and other digital platforms. TechNet warned the bill’s definition of “marketplace” and strict liability could chill legitimate speech and commerce and urged narrowly tailored language. Shay Gilmore, representing hemp manufacturers including MedTerra, warned sweeping restrictions could cut off “vital channels” for consumers and cost jobs and tax revenue.
Committee members pressed the author on narrowing language, exemptions for lawful non-intoxicating hemp products and whether the bill would single out platforms that enforce policies against illicit sales. Supporters said they are working to tailor the bill and noted related legislation (by Assemblymember Aguiar‑Curry) addresses definitions of hemp and intoxicating products.
The bill was moved to appropriations. The author pledged further work on narrow tailoring, an affirmative‑defense approach for good‑faith platforms and consultation about First Amendment and dormant‑commerce‑clause risks.
