State audit finds unclear cannabis packaging rules; lawmakers and health experts push for clearer standards

A State Auditor's report and a Joint Legislative Audit Committee hearing on May 20 examined how current rules and enforcement practices by the Department of Cannabis Control (DCC) may leave children exposed to cannabis products that resemble sweets and beverages.

State Auditor Parks told the committee the audit found three core problems: prohibited design elements are not well defined and are applied subjectively; products can enter the market without prior review, leaving enforcement reactive; and DCC's oversight practices and data systems make it difficult to identify and escalate repeat violators. "The department's regulations on prohibited design elements are not always well defined or commonly understood, leading to subjectivity and at times inconsistent enforcement," Parks said.

Why it matters: Lawmakers and public-health witnesses linked vague packaging rules to a sharp increase in calls to poison-control centers for young children. The transcript records poison-control calls for children age 5 and younger rising from 148 in 2016 to 842 in 2023, a near fivefold increase cited by committee members as the impetus for the audit.

Key audit findings and evidence

- Subjective enforcement: The auditor's team reviewed packaging decisions on dozens of products and said staff often reached different conclusions about whether designs were "attractive to children." Parks told the committee auditors disagreed with DCC on 13 of 80 products the offices reviewed, about 16% of cases in the sample.

- Packaging examples: The audit presentation included packages with cartoon faces, colorful fonts and imagery reminiscent of cereal or candy. Parks said DCC sometimes focused on permissible ingredient images while overlooking other child-appealing design elements.

- Beverage serving-size gap: The audit noted edibles are limited under regulation to 100 mg THC per package and 10 mg servings, but DCC has no clear way to measure a serving in opaque beverage cans. Parks recommended considering container-level limits or requiring measuring devices as other jurisdictions do.

DCC response and operational changes

Deputy Director Christina Dempsey and inspection chief Zahra Ruiz said the department has taken the audit seriously and described operational steps taken since the audit period: establishing a centralized label-review team, redirecting staff to labeling review, enhancing market-surveillance tools, improving case-file standards so inspectors document prior compliance history, and upgrading databases to better track labeling actions. "We view this audit not simply as an evaluation of past practices, but as an opportunity to strengthen our operations," Dempsey said.

On enforcement tools, Ruiz said DCC uses notices to comply as its lowest-level action but has authority to issue citations, embargo products from retail space, order abatement and pursue license actions. Ruiz said the department has begun taking escalated disciplinary actions since the audit.

Divergent policy options debated

Lawmakers, public-health experts and industry representatives agreed on the goal of keeping cannabis away from children but differed on the best approach:

- Public-health advocates (Dr. Lynn Silver, Dr. Alisa Paden) urged more prescriptive measures including plain packaging, bans on added flavors, lower potency or serving limits for beverages and a premarket packaging-review team. Silver said many 2024 public-health recommendations "have not been adopted to date" and called for prompt legislative action.

- Industry groups (Karen Woodson of the California Cannabis Industry Association; Amy Jenkins of the California Cannabis Operators Association) argued for objective, observable design standards rather than broad categorical bans. Jenkins said her group's review found roughly 68% of evaluated products were clearly compliant and about 10% were clearly out of compliance; the remainder fell in a gray zone. She proposed defining specific features (mascots, anthropomorphism, bubble fonts) and focusing enforcement where risk is highest.

- Many legislators pressed DCC on whether the state or the agency should adopt premarket review (Oregon-style), whether plain packaging is an appropriate baseline, and whether the department needs additional resources to consolidate databases and increase inspections.

Public comment and school impacts

Researchers and school advocates told the committee certain design features increase youth interest and described disruptions in schools from seized products. Jim Keddy, executive director of Youth Forward, said local high schools collect large quantities of these products and that many items found in schools had been obtained from legal dispensaries.

Next steps

Committee chairs said they expect results from DCC and signaled willingness to pursue statutory changes if DCC does not make adequate progress. Chair Harabedian said clearer legislative direction could help by specifying prohibited design elements and that the committee will monitor implementation.

The hearing did not produce legislative votes. Lawmakers called for collaboration among the legislature, DCC, public-health experts and industry to develop clearer, enforceable standards and to consider options ranging from refined statutory language to premarket review or plain-packaging rules.

Reporting note: Quotes and attributions in this article come from testimony and exchanges during the Joint Legislative Audit Committee hearing.