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Committee considers SB 378 to hold online marketplaces accountable for illegal intoxicating hemp and illicit cannabis sales
Summary
Sen. Scott Wiener presented SB 378 to require online marketplaces to take steps to prevent and report sales of illegal intoxicating hemp and unlicensed cannabis products and to create civil penalties when people are harmed. Supporters from licensed cannabis operators and labor unions said illicit online sellers are undermining safety and licensed
Sen. Scott Wiener presented Senate Bill 378 to the Assembly Judiciary Committee, saying the bill would allow consumers to seek civil penalties against online marketplaces that advertise illegal intoxicating hemp and unlicensed cannabis products.
Wiener said the measure would be narrowed to avoid sweeping in legitimate wellness hemp products and to address strict liability concerns for “good faith” marketplaces; he said he plans to remove references to industrial hemp and to work on standing and an affirmative defense if the Department of Cannabis Control (DCC) incorrectly identifies an advertiser as licensed.
Supporters included UFCW Western States Council, licensed cannabis manufacturers and retailers, labor-management committees and local government offices. Tiffany Devitt, representing San Diego Joint Labor-Management Committee, said online sales of illegal products have hurt licensed businesses and that many products purchased online were not taxed and contained synthetics. Kristen Heidelbach of UFCW cited CDPH emergency regulations and said DCC enforcement focuses on storefront enforcement while online marketplaces operate in a “regulatory blind spot.”
Opponents included TechNet, MedTerra and other hemp-industry groups and some tech companies. TechNet and marketplace representatives warned the bill’s broad definitions and strict liability could sweep in mapping services, search engines or sellers that permit user-to-user communications, and could raise First Amendment and dormant commerce clause issues. Several witnesses urged narrower tailoring or a requirement that local governments use administrative subpoenas where appropriate.
Committee members urged the author to narrow the bill’s definition of covered platforms and to clarify exclusions for lawful non-intoxicating hemp products. Some members stressed the need to protect children from easy online access to potent intoxicating hemp; others asked for technical fixes to avoid unintentionally blocking lawful wellness products.
The committee recorded a motion to pass SB 378 as amended to the Appropriations Committee.
