AB 1209 California Assembly · 2025-2026 Regular Session

Workers' compensation: cannabis industry.

Summary

Existing law, the Control, Regulate and Tax Adult Use of Marijuana Act (AUMA) , approved by the voters at the November 8, 2016, statewide general election, regulates the cultivation, distribution, transport, storage, manufacturing, testing, processing, sale, and use of marijuana for nonmedical purposes by people 21 years of age and older. The existing Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) , among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities. Existing law establishes a workers' compensation system, administered by the Administrative Director of the Division of Workers' Compensation, to compensate an employee, as defined, for injuries sustained in the course of employment. Existing law requires every employer to secure the payment of workers' compensation as provided by law and imposes civil and criminal penalties on employers that fail to secure the payment of workers' compensation. Existing law authorizes an employer, pursuant to this provision, to insure against liability in insurers duly authorized to write compensation insurance in the state or to secure from the Director of Industrial Relations a certificate of consent to self-insure. This bill would authorize the administrative director or their agent to require an employer that is licensed or required to be licensed under MAUCRSA to provide proof that it has secured payment of workers' compensation to the administrative director or their agent. The bill would authorize the administrative director or their agent to establish a schedule for compliance that includes dates for when a licensee may be required to comply with these requirements. The bill would require the administrative director to provide assistance to any employer or entity that notifies the administrative director that it has been unable to obtain coverage and authorize the administrative director to extend the deadline for compliance, and would exempt any employer that secures the payment of workers' compensation pursuant to these provisions from civil or criminal liability for prior failure to secure the payment of compensation. The bill would authorize the administrative director to contract with one or more agents to assist employers in complying with these provisions, as specified.

Issues: ✓ Labor & Employment

Bill status failed 1 of 4 stages cleared

Introduction

Feb 2025

Committee Review

Floor Vote

Governor

Introduced Feb 21, 2025 Last action Feb 2, 2026

Maddy AI version diff · 4 comparisons

What changed between versions

04/10/25 - Amended Assembly → AB1209 · 5 edits

MODERATE

The final version of AB 1209 shifts from a mandatory annual reporting requirement to a discretionary framework where the administrative director 'may require' cannabis employers to provide proof of workers' compensation coverage. It removes the specific 120-day/60-day compliance timeline, adds flexibility for per-licensee schedules, and broadens the penalty exemption from covering only prior 'inability' to cover any prior 'failure' to secure coverage.

Scope change

The bill's enforcement mechanism shifted from a prescriptive, deadline-driven compliance regime to a more flexible, director-discretionary framework. The scope of the penalty exemption was broadened to cover all prior failures rather than only prior inability to obtain coverage.

REQUIREMENT

Changed from a mandatory requirement ('An employer shall annually provide proof') to discretionary authority ('The administrative director or their agent may require an employer to provide proof'). This gives the administrative director flexibility in when and how to enforce compliance rather than imposing a fixed annual obligation on all cannabis employers.

Added new subsection (b)(3) allowing the administrative director to establish individualized compliance schedules for each identified licensee, rather than only group-based schedules.

TIMELINE

Removed the specific deadline requiring the first group of licensees (those with the most licenses) to begin reporting no later than 120 days after the effective date or 60 days after contracting with an agent, whichever is earlier. This eliminates a hard compliance deadline.

ENFORCEMENT

Changed the penalty exemption language from 'prior inability to secure the payment of compensation' to 'prior failure to secure the payment of compensation.' This broadens the safe harbor: previously only employers who were unable to obtain coverage (e.g., due to banking/insurance barriers facing cannabis businesses) were protected from prior penalties; now any employer that complies going forward is exempt from all prior penalties regardless of reason.

SCOPE

The staffing agency provision was restructured from being embedded within subsection (b)(2) into its own standalone subsection (c), making it a clear independent obligation for employers who use temporary or staffing agencies to obtain and provide proof of workers' compensation coverage for those workers.

03/20/25 - Amended Assembly → 03/26/25 - Amended Assembly · 7 edits · Mar 26, 2025

MODERATE

The March 26 amendment to AB 1209 removes the urgency clause so the bill no longer takes effect immediately, lowers the vote threshold from two-thirds to a simple majority, extends the initial compliance deadline from 60 to 120 days, narrows the assistance trigger for employers who cannot obtain coverage, and makes the administrative director's authority to contract with agents discretionary rather than mandatory. These changes make the bill easier to pass and give employers more time to comply.

TIMELINE

The urgency clause was deleted entirely. The bill no longer takes effect immediately upon passage and will instead follow the standard 90-day delay.

The deadline for the first group of licensees (those holding the most licenses) to begin reporting was extended from 60 days to 120 days after the effective date.

REQUIREMENT

The vote requirement changed from a two-thirds majority to a simple majority, making it easier for the bill to pass the Assembly.

The administrative director's authority to contract with agents to assist employers changed from mandatory ('shall contract') to discretionary ('may contract').

ELIGIBILITY

The assistance provision was narrowed. Previously it applied to employers with 'insufficient workers' compensation coverage' or who were 'unable to obtain coverage,' including those unable to obtain payroll, banking, or other related services. Now it only applies to employers who have been 'unable to obtain workers' compensation insurance.'

TECHNICAL

Language requiring that contracts with agents involve no exchange of monetary consideration to the agent was removed, as were legislative findings declaring the services to be of a special and unique nature and a new state function under Government Code Section 19130.

SCOPE

The enforcement provision (notification to the Division of Labor Standards Enforcement for non-compliance) that previously appeared only in Section 3700.9 was also added as subdivision (g) of Section 3700.7, consolidating enforcement references within the primary section.

03/26/25 - Amended Assembly → 04/10/25 - Amended Assembly · 5 edits · Apr 10, 2025

MODERATE

AB 1209 was significantly restructured to consolidate two separate Labor Code sections (3700.7 and 3700.9) into a single section (3700.7). The most substantive change is shifting the proof-of-coverage requirement from a mandatory annual obligation on employers to a discretionary power of the administrative director, who 'may require' rather than employers 'shall annually provide.' The temporary agency/staffing agency coverage requirement formerly in standalone Section 3700.9 was folded into Section 3700.7 as subdivision (c).

REQUIREMENT

The core obligation changed from a mandatory annual requirement ('An employer shall annually provide proof of compliance') to a discretionary administrative power ('The administrative director or their agent may require an employer to provide proof of compliance'). This gives the administrative director flexibility in when and how to enforce the requirement.

A new subdivision (b)(3) was added allowing the administrative director to establish a separate compliance schedule specifically for the temporary agency/staffing agency proof-of-coverage requirement, giving additional flexibility in phasing in that obligation.

SCOPE

Section 3700.9, which was a standalone provision requiring employers who contract with third-party employers or temporary agencies to obtain and provide proof of workers' compensation coverage for those workers, was removed as a separate section. Its substance was folded into Section 3700.7 subdivision (c).

DEFINITION

In the penalty exemption provision, the language changed from 'prior inability to secure the payment of compensation' to 'prior failure to secure the payment of compensation.' This narrows the scope of the safe harbor by replacing a broader term ('inability') with a more specific one ('failure').

TECHNICAL

The bill title and legislative counsel's digest were updated to reflect that only Section 3700.7 is being added rather than both Sections 3700.7 and 3700.9.

Floor votes

How they voted

No floor votes recorded yet.

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Feb 2, 2026

Lower · Passed

From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.

lower

Apr 21, 2025

Lower · Passed

In committee: Set, first hearing. Hearing canceled at the request of author.

lower

Apr 21, 2025

Committee

Re-referred to Com. on B. & P.

lower

Apr 10, 2025

Introduced

From committee chair, with author's amendments: Amend, and re-refer to Com. on B. & P. Read second time and amended.

lower

Apr 2, 2025

Lower · Passed

From committee: Do pass and re-refer to Com. on B. & P. (Ayes 15. Noes 2.) (April 2). Re-referred to Com. on B. & P.

lower

Mar 27, 2025

Committee

Re-referred to Com. on INS.

lower

Mar 26, 2025

Introduced

From committee chair, with author's amendments: Amend, and re-refer to Com. on INS. Read second time and amended.

lower

Mar 24, 2025

Committee

Re-referred to Com. on INS.

lower

Mar 20, 2025

Introduced

From committee chair, with author's amendments: Amend, and re-refer to Com. on INS. Read second time and amended.

lower

Mar 13, 2025

Committee

Referred to Coms. on INS. and B. & P.

lower

Feb 22, 2025

Lower · Passed

From printer. May be heard in committee March 24.

lower

Feb 21, 2025

Introduced

Introduced. To print.

lower

1 primary · 0 co-sponsors