Online marketplaces: illicit cannabis: reporting and liability.

The definition of 'online cannabis marketplace' in Section 22943(g) was narrowed by removing one of the four listed criteria that would classify a platform as an online cannabis marketplace. The list went from four numbered items to three, with the item 'Permits offers for the sale of cannabis or a cannabis product' appearing to have been removed as a standalone criterion, reducing the number of platforms subject to the bill's reporting and warning requirements.

Page numbers shifted from 95 to 94 throughout the document, and indentation was adjusted in multiple sections. The legislative history header was updated to reflect the new Assembly amendment date of July 9, 2025.

The knowledge standard for joint and several liability was narrowed. The old text referenced what the marketplace 'knew or should have known had actual knowledge,' while the enrolled version only references what the marketplace 'had actual knowledge.' This removes a negligence-based standard and limits liability to cases where the marketplace actually knew about the violation.

The attorney's fees award for violating an injunction was reduced from 'twice its reasonable attorneys' fees and costs' to simply 'its reasonable attorneys' fees and costs.' The civil penalty of up to $500,000 for injunction violations remains unchanged.

The definition of 'online cannabis marketplace' in subdivision (g)(2) was changed from 'Permits offers for the sale of cannabis or a cannabis product' to 'Offers for sale cannabis or a cannabis product.' This narrows the scope by removing the broader 'permits' language and requiring the marketplace itself to make the offer.

Cross-references to Section 26001 in the definitions of 'cannabis' and 'cannabis product' had specific subdivision references removed (e.g., 'subdivision (f)' and 'subdivision (k)' were deleted), making the definitions less rigid.

A drafting error was fixed in subdivision (g)(1) where 'third party third-party seller' was corrected to 'third-party seller.'

Header changed from 'Senate Bill No. 378' to 'STATE OF CALIFORNIA AUTHENTICATED ELECTRONIC LEGAL MATERIAL' with Chapter 411 designation added.

Added Governor approval and filing date: 'Approved by Governor October 6, 2025. Filed with Secretary of State October 6, 2025.'

Removed legislative passage dates (Senate September 13, 2025; Assembly September 12, 2025), clerk signature blocks, and the Governor's receipt date line.

Page numbering changed from 'SB 378' format to 'Ch. 411' format throughout the document.

Added an explicit operative date of July 1, 2026 (new Section 22943.6), giving marketplaces roughly a year to comply before requirements take effect.

Removed the word 'strict' from 'strict joint and several liability,' changing it to plain 'joint and several liability.' This eliminates the strict liability standard, meaning plaintiffs must now prove fault rather than liability attaching automatically upon violation.

Changed civil penalty language from fixed amounts to maximums: 'a civil penalty of $250,000' became 'up to $250,000' and 'a civil penalty of $500,000' became 'up to $500,000,' giving courts discretion to award less than the maximum.

Added Section 22943.4(d) clarifying that public prosecutors (as described in Section 17204 of the Business and Professions Code) may bring enforcement actions, ensuring government enforcement is not preempted by private right of action.

Changed 'A party may bring an action to enforce this section' to 'Any person may bring an action,' broadening standing for private enforcement actions.

Changed the knowledge standard from what the marketplace 'knew or should have known' to what it 'had actual knowledge of.' This narrows the standard from constructive knowledge (what a reasonable marketplace would have discovered) to only what the marketplace actually knew, making it harder to establish enhanced damages.

Added safe harbor provisions in Section 22943.2(d)(3) and (4): a person cannot bring an enforcement action, and it is not a violation, if the marketplace removes the reported advertisement or business information within 48 hours of receiving the report.

Narrowed the definition of 'online hemp marketplace' by adding a limiting clause: 'as applied to products containing hemp for human consumption, including, but not limited to, cosmetics, food, food additives, dietary supplements, or lotions.' This excludes non-consumption hemp products from coverage.

Removed references to 'unregistered hemp products' from the prohibited advertising and liability provisions. The bill now only covers unlicensed cannabis sellers and intoxicating hemp products, dropping the separate category of unregistered hemp products.

Modified the definition of 'intoxicating hemp product' by adding 'and is unlawful to sell without a license' to both prongs. A product must now not only exceed THC limits or have detectable THC, but also be specifically unlawful to sell without a license.

Added a new definition of 'third-party seller' in both the cannabis marketplace chapter (Section 22943(h)) and hemp marketplace chapter (Section 22944(i)), defining it as a person or entity independent of the marketplace who sells, offers to sell, or contracts with the marketplace to sell a product.

Removed 'processes, collects, or administers the payment for the sale of cannabis or a cannabis product' from the definition of online cannabis marketplace (Section 22943(g)), narrowing which platforms are covered.

Removed the payment processing criterion from the definition of online hemp marketplace (Section 22944(h)), similarly narrowing coverage.

Changed references in the hemp marketplace chapter from 'industrial hemp product' to 'industrial intoxicating hemp product,' limiting the bill's hemp provisions to only products with detectable THC or exceeding allowable limits, rather than all industrial hemp products.

Changed from 'strict liability' to 'strict joint and several liability' for online marketplaces that facilitate unlawful transactions, and added the qualifier 'unless specified conditions are met,' creating potential exceptions to liability.

Added provisions for affirmative defenses available to online marketplaces in actions brought under the bill's liability provisions.

Authorized an online marketplace to seek indemnification against an advertiser of cannabis, cannabis products, or intoxicating hemp products that misrepresented to the marketplace that they were licensed or registered to sell the product.

Changed standing to bring an enforcement action under Section 22943.2(d)(2) from 'a party' to 'any person,' broadening who can sue.

Section 22943.4(a) warning graphic: removed the requirement that the graphic occupy at least one-half the screen, and removed all five specific warnings (about unlicensed sellers, fentanyl/chemicals, harm to children, candy-like appearance lacking warning labels, and illegality/law enforcement data sharing). The graphic now only needs to warn that the marketplace may be displaying, storing, or hosting unlicensed sellers of cannabis or cannabis products.

Section 22943.2(d): removed the specific list of parties authorized to bring civil actions (reporting individuals, parents/guardians of minors, labor unions representing workers at licensed sellers, city attorneys/district attorneys/county counsel, the Attorney General, and licensed sellers). Replaced with a general provision stating 'A party may bring an action to enforce this section,' effectively granting standing to any party.

Multiple typo and formatting corrections throughout: removed duplicate references (e.g., 'Section 26001 of the Business and Professions Code. 26001.' simplified to 'Section 26001.'), fixed article errors ('a the sale' to 'the sale', 'a an internet website' to 'an internet website'), corrected 'phone telephone number' to 'telephone number', and updated page numbers from 96 to 95.

Section 1714.48 of the Civil Code was removed from the bill. That section had provided additional statutory damages if other provisions of the bill were stricken or enjoined in final judgment, and an online marketplace breached its responsibility of ordinary care and skill as a substantial factor in causing harm to a consumer.

The consumer warning graphic in Section 22943.4(a) now explicitly requires the statement that the marketplace may be displaying, storing, or hosting unlicensed sellers of cannabis or cannabis products, in addition to the existing five warning items about fentanyl, child safety, labeling, and illegality.

Various clerical corrections throughout: 'The the' changed to 'the', 'makes make up' to 'make up', 'Sheriff sheriff' to 'sheriff', 'themself. themselves.' to 'themselves.', 'website' to 'internet website', 'phone number' to 'phone telephone number', and cross-references clarified by adding 'of the Civil Code' after section numbers.

The word 'prominent' was removed from the requirement that online cannabis and hemp marketplaces establish a reporting mechanism. The mechanism must now only be 'clear and conspicuous' rather than 'prominent clear and conspicuous,' which is a lower display standard.

The digest language describing strict liability was corrected. The old text read 'facilitated the connection between violates that prohibition' (grammatically broken). The new text reads 'violates that prohibition, and is a substantial factor in an unlawful transaction,' clarifying that both conditions must be met for strict liability to apply.

A separate provision from the digest imposing strict liability on an online marketplace that 'facilitated the connection between a consumer and a seller of an intoxicating hemp product' was removed. This may indicate the provision was consolidated into the general strict liability standard or eliminated entirely.

Multiple typo corrections were made throughout, including 'sales makes up' to 'sales make up,' a dangling 'The' corrected to 'themselves,' and page numbering adjusted from 98 to 97.

Added Section 1714.48 to the Civil Code, expanding strict liability to cover online marketplaces that facilitate connections between consumers and sellers of unregistered hemp products (a new category not in the introduced version).

New prohibition on online marketplaces engaging in paid online advertising related to unlicensed cannabis sellers, intoxicating hemp products, or unregistered hemp products.

Reporting mechanism requirements changed from 'a prominent mechanism' to 'a prominent clear and conspicuous mechanism' in both cannabis and hemp marketplace provisions, raising the visibility standard for consumer reporting tools.

The warning graphic displayed before consumers can access a non-verifying marketplace is now required to be 'clear and conspicuous' rather than simply a 'graphic.'

Definition of 'intoxicating hemp product' expanded to include any inhalable hemp product with a detectable THC concentration, not just those exceeding allowable levels under the Sherman Food, Drug, and Cosmetic Law. A new definition of 'inhalable hemp product' was added covering flower, prerolls, vaping cartridges, liquids, prefilled devices, shatter, wax, budder, and other concentrates.

New definition of 'clear and conspicuous' added to both the cannabis and hemp marketplace chapters, specifying it means larger type, contrasting type/font/color, or set off by symbols. The Attorney General may promulgate regulations further defining the term.

New provision for additional statutory damages if the strict liability provisions are stricken or enjoined in final judgment, allowing recovery based on ordinary negligence (breach of duty of care) as a fallback theory.