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DCC-2026-03-R: Notice of Proposed Rulemaking Action

Notice of Proposed Rulemaking Action: Group Tagging of Cannabis Plants

Notice is hereby given that the Department of Cannabis Control (Department) proposes to adopt the amended regulations described below after considering all comments, objections, and recommendations regarding the proposed action.

Public Hearing

The Department will hold a virtual public hearing on Tuesday, July 28, 2026, beginning at 10 a.m.

Attendees may participate via WebEx online meeting platform or telephone conferencing. To participate via WebEx online meeting platform, please contact Lilly Quynn at 1-844-612-2322 or outreach@cannabis.ca.gov by 4:30 p.m. on Monday, July 27, 2026, to request a link to the meeting. A link to the meeting will also be posted on the Department’s website no later than 9 a.m. the day of the hearing.

For those who wish to attend the hearing in person, including those who require reasonable accommodations, limited seating will be available in the Department Hearing Room, 2920 Kilgore Road, Rancho Cordova, CA 95670. Please contact Lilly Quynn at 1-844-612-2322 or outreach@cannabis.ca.gov by 4:30 p.m. on Monday, July 27, 2026, to request to attend the hearing in person or by 4:30 p.m. on Tuesday, July 14, 2026, if reasonable accommodations are necessary.

Participants will be given instructions on how to provide oral comment once they have accessed the hearing. The hearing will proceed on the dates noted above until all testimony is submitted or 12:00 p.m., whichever is later. At the hearing, any person may present oral or written statements or arguments relevant to the proposed action described in the Informative Digest. The Department requests, but does not require, that persons who make oral comments at the hearing also submit a written copy of their testimony via email.

Written Comment Period

Any interested person, or the interested person’s authorized representative, may submit written comments relevant to the proposed regulatory action by mail or email to:

Department of Cannabis Control
Legal Affairs Division
2920 Kilgore Road
Rancho Cordova, CA 95670
E-mail: publiccomment@cannabis.ca.gov

The written comment period closes on Monday, July 27, 2026. To be considered by the Department, a comment must be received by Monday, July 27, 2026.

Authority

Business and Professions Code sections 26013.

Reference

Business and Professions Code sections 26013, 26050.1, 26060, 26067, 26069, 26070, 26120, 26160, and 26161.

Informative Digest / Policy Statement Overview

Summary of Existing Laws and Effect of the Proposed Action

Business and Professions Code (BPC) section 26067 requires the Department to establish a track and trace program for reporting the movement of cannabis, industrial hemp, and cannabis products throughout the distribution chain that utilizes unique identifiers (UIDs) to track cannabis and cannabis products. To that end, existing regulations require Department licensees to assign UIDs through the application of plant and package tags labeled with alphanumeric codes, which must be entered into the track and trace system. Existing regulations further require a plant tag to be attached to the base of each plant in a designated canopy area.

Senate Bill 622 (Chapter 496, Statutes of 2023) amended BPC section 26069, subdivision (a)(2) to remove the requirement that a tag be physically attached to the base of each plant and allow the Department to determine how to record the UID of each plant. Assembly Bill 8 (Chapter 248, Statutes of 2025) subsequently removed the requirement that each plant have its own UID.

The proposed action would update definitions to reflect the statutory changes SB 622 and AB 8; eliminate the requirement to tag cannabis plants individually and establish requirements for tagging cannabis plants as a group; eliminate the requirement to order tags by a specific date after licensure; extend the timeframe to record the receipt of tags in the track and trace system; and make non-substantive, grammatical edits.

Evaluation of Inconsistency with Federal Laws

The United States Drug Enforcement Administration under the Controlled Substances Act (21 U.S.C. §812) lists cannabis as a Schedule 1 Drug. This means that commercial cannabis activity is illegal under federal law. However, California, through the MAUCRSA and other laws, has decriminalized the cultivation, sale, and possession of cannabis goods for persons aged 21 or older and for medicinal patients.

Objectives and Anticipated Benefits of the Proposed Regulations

The proposed regulations will streamline existing regulatory requirements and ease the burdens associated with licensee compliance while maintaining the Department’s regulatory oversight. Specifically, the proposed regulations will provide immediate financial relief and streamline administrative requirements for cultivation licensees. Allowing for the group tagging of plants will decrease licensee labor costs, through replacing the time-intensive work of hand-tagging individual plants with the assignment of a single tag to a group of plants, as well as the reduced labor associated with recording planting activities within the track and trace system. These changes will free up licensee resources currently devoted to individual plant tagging and recordkeeping; easing administrative burdens this manner will help incentivize continued participation in the regulated cannabis market.

Group tagging will also reduce the significant environmental harm associated with tag disposal. Plant tags are fitted with electronic chips that carry proprietary coding and data about the plants to which they are associated. Such plant tags are considered one-time use and may not be used on other plants. Because the chips cannot be easily separated from the rest of the tag, they are treated as non-recyclable e-waste. By decreasing the volume of single-use tags and fasteners, the Department can reduce plastic and mixed-material waste entering the landfill stream.

Evaluation of Inconsistency/Incompatibility with Existing State Regulations

After careful evaluation, the Department has determined that the proposed changes are not inconsistent or incompatible with existing regulations.

Disclosures Regarding the Proposed Action

The Department has made the following initial determinations:

  • Mandate on local agencies or school districts: None.
  • Cost or savings to any state agency: The Department expects a cost of approximately $1.12 million for a one-time track and trace system update to accommodate group tagging. This cost would be absorbed within the Department’s existing allocations for system changes. The Department also expects one-time cost of approximately $20,000 for workload associated with updating internal guidance and procedures and training Department staff. These costs would be absorbed within the Department’s existing budge authority.
  • Cost to any local agency or school district required to be reimbursed in accordance with Government Code sections 17500 through 17630: None.
  • Other nondiscretionary cost or savings imposed upon local agencies: None.
  • Cost or savings in federal funding to the state: None.
  • Significant, statewide adverse economic impact directly affecting businesses, including the ability of California businesses to compete with businesses in other states: None.
  • Cost impacts on a representative private person or business: Licensed commercial cannabis cultivation businesses will incur minor annual costs of, on average, approximately $70 for tagging and demarcation materials. Licensed cultivators would, on average, see a cost savings of approximately $2,000 annually due to reduced labor costs.
  • Effect on housing costs: None.

Results of the Economic Impact Assessment

The Department concludes that the proposal is unlikely to create new jobs, eliminate any jobs, create any new businesses, eliminate existing businesses, or result in the expansion of businesses currently doing business in the state. The Department believes approximately 56 jobs may be created statewide. The proposed regulations may encourage expansion of licensed cannabis businesses in the State by lowering cultivator production costs, thereby increasing retail sales of cannabis, and increasing secondary business activity. However, the market analysis shows that while the proposed regulations would cause an increase in gross sales of cannabis-based products, the increase is modest relative to the size of the licensed market in California (increase of 0.06 percent). It would be a modest expansion of existing businesses but would not significantly increase the number of businesses in operation. The proposed regulations are not expected to significantly benefit the public health and welfare or worker safety. The proposed regulations would significantly reduce the volume of single-use tags and fasteners discarded by licensed cultivation businesses, thereby reducing the waste stream and benefitting the state’s environment.

Small Business Determination

The proposed regulations would impact all licensed cultivation businesses (4,775) and licensed retailers (1,455), approximately 90% of which qualify as small businesses.

Consideration of Alternatives

In accordance with Government Code section 11346.5, subdivision (a)(13), the Department must determine that no reasonable alternative it considered or that has otherwise been identified and brought to its attention would be more effective in carrying out the purpose for which the action is proposed, as effective and less burdensome to affected private persons than the proposed action, or more cost-effective to affected private persons and equally effective in implementing the statutory policies or other provisions of law.

Contact Persons

Inquiries concerning the proposed rulemaking action may be directed to:

Melissa Brokken
Department of Cannabis Control
2920 Kilgore Road
Rancho Cordova, CA 95670
916-465-9025
Regulations@cannabis.ca.gov

The backup contact person for these inquiries is:

Nicole Roberts
Department of Cannabis Control
2920 Kilgore Road
Rancho Cordova, CA 95670
916-465-9025
Regulations@cannabis.ca.gov

Availability of Statement of Reasons, Text of Proposed Regulations, and Rulemaking File

The Department will make the entire rulemaking file available for inspection and copying throughout the rulemaking process at its office at the above address. As of the date this notice is published in the Notice Register, the rulemaking file consists of the Notice of Proposed Action, the proposed text of the regulations, the Initial Statement of Reasons, and the STD. 399. Please direct requests to inspect or copy the rulemaking file to the contact person(s) listed above.

Availability of Changed or Modified Text

After considering all timely and relevant comments received, the Department may adopt the proposed regulations substantially as described in this notice. If the Department makes modifications that are sufficiently related to the originally proposed text, it will make the modified text (with the changes clearly indicated) available to the public for at least 15 days before adopting the regulations as revised. Please direct requests for copies of any modified regulations to the contact person(s) listed above. The Department will accept written comments on the modified regulations for the duration of the period of public availability.

Availability of The Final Statement of Reasons

Upon its completion, the Department will make copies of the Final Statement of Reasons available. Please direct requests for copies to the contact person(s) listed above.

Availability of Documents on the Internet

Copies of the Notice of Proposed Action, the Initial Statement or Reasons, and the text of the regulations with modifications highlighted, as well as the Final Statement of Reasons, when completed, and modified text and notices thereof, if any, may be accessed via the Department’s website at https://www.cannabis.ca.gov/cannabis-laws/rulemaking/.