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Ways and Means advances bill to curb deceptive hemp storefronts; Cannabis Compliance Board to investigate, AG to levy penalties
Summary
The committee advanced Assembly Bill 504, which makes certain misleading statements and signage by stores selling hemp products deceptive trade practices. The Cannabis Compliance Board will investigate alleged violations and the Attorney General’s Office will levy penalties under a committee amendment; fiscal notes were removed.
The Committee on Ways and Means advanced Assembly Bill 504 on a voice vote after a public hearing that drew industry, public‑health and business supporters.
AB 504, sponsored by Assemblymember Joe Dalia, would make certain misleading statements about hemp products and businesses—particularly those that create consumer confusion with licensed marijuana dispensaries—deceptive trade practices under state law. “This bill is about cracking down on the same trade practices in the cannabis industry,” Dalia told the committee, citing unlicensed businesses that have targeted tourists in gaming corridors.
Why it matters: Committee members and public witnesses said the practice diverts customers away from licensed dispensaries and raises public‑health concerns because some storefronts present hemp products in ways that give the impression they contain intoxicating levels of THC. Supporters argued clearer signage and limits on misleading descriptions would protect consumers and licensed businesses.
How the amended enforcement structure works: Under a conceptual amendment presented to the committee, the Cannabis Compliance Board (CCB) will handle investigations of alleged deceptive practices and forward completed investigations to the Attorney General’s Bureau of Consumer Protection for enforcement and fines. Mike Morton of the Attorney General’s Office told the committee the office will levy penalties based on CCB investigations; James Hamm, executive director of the CCB, said the board expects to manage the investigative workload with existing staff and three law‑enforcement hires carried forward in its budget.
Public testimony: Nearly all in‑room and remote testimony was in support. Brownstein attorney Harrison Bahn and several industry groups said consumers will benefit and licensed cannabis sales may increase if confusion is reduced. Public‑health and community advocates also supported the measure.
Fiscal notes and outcome: Sponsors said the fiscal notes originally filed by the Attorney General and CCB were resolved through the amendment; fiscal staff confirmed on the record that the fiscal issues had been addressed and the committee moved the bill to a work session. Assemblymember Bacchus moved to amend and do pass as amended, seconded by Assemblymember Hategui; the motion carried by voice vote.
What’s next: The committee approved the bill for subsequent legislative steps. If enacted, the bill will require businesses selling hemp products to provide clearer disclosures and will create the CCB/AG enforcement pathway approved in committee.
