• Address: Glendale, CA
  • Make a call: 818.275.2465
  • Email Address: info@baghoomianlaw.com


AB766 California Cannabis Invoices Payments: Essential Guide

The California State Legislature has recently introduced a new bill, AB 766, which specifically addresses the payment of invoices for goods and services within the cannabis industry. This bill seeks to streamline the payment process and improve the overall functioning of the cannabis market in California. Aimed at ensuring timely payments between licensees, it aims to create a more organized framework for financial transactions within the sector.

Under the provisions of AB 766, licensees are required to pay for goods and services sold or transferred with a total value of at least $5,000 by another licensee within 15 days following the final date set forth in the invoice or invoices. By implementing such regulations, the California government aims to foster transparency, accountability, and professionalism within the quickly expanding cannabis industry.

The passage of this bill would significantly impact the dynamic of the cannabis market in California, promoting a more efficient and reliable business environment for all stakeholders. Establishing clear guidelines for invoice payments ensures that industry participants are aware of their financial obligations and fosters a culture of responsibility, ultimately contributing to the sustainable growth of the cannabis sector within the state.

AB 766: California Cannabis Invoices Payment Regulation

Proposition 64

Proposition 64, also known as the Control, Regulate and Tax Adult Use of Marijuana Act (AUMA), was passed in California in 2016. This legislation legalized cannabis for adult use and established regulations to govern the industry. The AUMA aimed to ensure public safety, protect the environment, and promote a competitive marketplace for the burgeoning cannabis industry.

Control, Regulate and Tax Adult Use of Marijuana Act

Under Proposition 64, the AUMA primarily focused on the regulation of cannabis-related goods and services, granting the state the authority to issue licenses for cannabis businesses. The act also established a framework for taxing and regulating commercial cannabis activity, including production, distribution, and sale.

Medicinal and Adult-Use Cannabis Regulation and Safety Act

Shortly after the passage of Proposition 64, the Californian legislature implemented additional regulatory changes through the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA). The goal of MAUCRSA is to consolidate and streamline regulatory oversight for both medicinal and adult-use cannabis markets in California. This involved the creation of a new governing body, the Department of Cannabis Control, to oversee the state licensing process for cannabis-related businesses.

In an effort to standardize the industry, AB 766 has been proposed to improve the payment of cannabis invoices, addressing the issue of unpaid invoices by streamlining the process and enforcing a system of credit management. California’s Cannabis Distribution Association, the California Cannabis Industry Association, and the California Cannabis Manufacturers Association all support the bill.

With AB 766, retailers will have a clearer framework regarding invoice payments, and licensed cannabis businesses will experience increased protection against non-payment. This regulation is expected to foster a more accountable and transparent cannabis supply chain within California, ultimately benefiting both cannabis operators and consumers.

How AB 766 Affects Cannabis Businesses

Commercial Adult-Use Cannabis Activity

AB 766 introduces notable changes to the way cannabis businesses handle invoices and payments in California. The bill’s primary focus is on the commercial adult-use cannabis activity aspect by ensuring transparency and improved regulation in invoice management for cannabis goods and services. This legislation affects licensed cannabis businesses and aims to create a more organized financial environment for the cannabis industry, benefiting both suppliers and customers.

As a result, cannabis business owners operating under local ordinances must adapt to these new financial practices, which ultimately contribute positively to the overall growth and stability of the sector.

License and Regulation

The regulations in AB 766 focus on licensure and local ordinances for cannabis businesses. This bill establishes standard procedures for handling invoices and payments related to the supply and sale of cannabis goods and services. It mandates a clear reporting process for licensed cannabis establishments, ensuring that transactions are documented and appropriately regulated.

Complying with the updated invoicing and payment guidelines in AB 766 ensures that cannabis businesses remain in good standing with California’s regulatory authorities. This compliance not only contributes to the growth of individual businesses, but also bolsters consumer confidence in the industry’s offerings and services as a whole. Furthermore, adherence to AB 766 provisions helps maintain a thriving cannabis market that can generate essential tax revenues for local communities.

In summary, AB 766 impacts California’s cannabis businesses by introducing updated invoice and payment regulations. By following these guidelines and adhering to local ordinances, cannabis business owners can maintain licensure, operate within the law, and contribute positively to the robust growth of the industry.

Invoice and Payment Requirements

Sales Invoices

AB766 is a California bill that sets requirements for cannabis licensees in respect to invoices and payments. Under this bill, a licensee shall pay for goods and services sold or transferred by another licensee with a total value of at least $5,000 no later than 15 days following the final date set forth in the invoice for the cannabis or cannabis products. The invoice must include essential information such as the sale or transfer date, the invoice due date, the invoice amount, and the name, address, and license number of the licensee who is owed payment.

Overall, this process ensures that all parties involved in the cannabis industry maintain records of their transactions for both businesses’ and regulators’ benefit. It is essential that a clear and detailed sales invoice is issued to maintain a transparent and efficient cannabis market in California.

Outstanding Invoices

In some situations, a licensee may fail to pay for goods or services within the specified 15-day timeframe. In these instances, the unpaid licensee, per AB766, is required to report the outstanding invoice to the department, including the necessary invoice details and the name, address, and license number of the licensee who failed to pay.

Following such a report, the department shall notify the licensee who has failed to pay, allowing them a chance to rectify the situation before further action is taken. This system ensures that all licensees involved in the cannabis industry remain accountable to each other and ultimately maintain the business’s legitimacy and professionalism.

By establishing and enforcing these invoice and payment requirements, California’s AB766 bill helps create a transparent and fair business environment for the cannabis industry. To comply with the bill, licensees must maintain accurate sales invoices, meet payment deadlines, and report any outstanding payment issues. Ultimately, these requirements contribute to the successful operation of California’s cannabis market, benefiting both medicinal and recreational users alike.

Oversight and Enforcement

Bureau of Cannabis Control

The Department of Cannabis Control is responsible for providing oversight and enforcement of cannabis-related businesses in California. This includes ensuring that licensees comply with AB766, a bill that outlines maximum terms by which cannabis licensees may sell goods on credit and the penalties associated with a failure to pay invoices in a timely manner.

The Department of Cannabis Control has the authority to enforce compliance through various actions, including issuing warnings, citations, and taking disciplinary measures against businesses violating the terms of AB766.

Warnings and Disciplinary Actions

  • Notice of Warning: The Department of Cannabis Control can issue a notice of warning to licensees when it finds that a cannabis business has violated certain regulatory provisions. This serves as an official, written notification of a violation and can serve as a precursor to more serious actions, such as citations or disciplinary actions.
  • Citation: In cases where a warning is not sufficient or a licensee fails to address the violations outlined in the notice of warning, the Department of Cannabis Control can issue a citation. The citation can include a specific monetary fine and/or a requirement to correct the violation within a specified time frame.
  • Disciplinary Action: If a cannabis business does not comply with AB766’s regulations even after receiving a notice of warning and a citation, the Department of Cannabis Control may escalate to disciplinary action. This can range from suspension or revocation of the business’s license to operate, monetary penalties, and other sanctions as deemed appropriate by the department.

The oversight powers granted to the Department of Cannabis Control serve to create a safer, more responsible cannabis industry and ensure that businesses adhere to the rules and regulations outlined in AB766.

Legislative Process and Amendments

Bill Text

AB766, a California bill concerning cannabis invoices payments, is under consideration in the state’s legislative process. The bill aims to require that licensees pay for goods and services with a total value of at least $5,000 sold or transferred by another licensee within 15 days of the final invoice date. This legislation is subject to amendments as it progresses through the process.

Committee Hearings

As part of the legislative process, AB766 is evaluated and discussed in committee hearings. After its introduction on February 13, 2023, the bill has made 25% progression through the legislative channels. The most recent update indicates that it was referred to the Assembly Appropriations Committee on April 26, where it was set for its first hearing and placed on the suspense file.

During these hearings, the committee chair orchestrates discussion and debates regarding the bill’s details, costs, and potential amendments. The committee on Appropriations, in particular, assesses the financial implications of the proposed legislation. In addition, the bill might be referred to other committees, such as the Committee on Business and Professions (Com. on B. & P.) for further examination and expert input.

Throughout the progression of AB766, it may go through author’s amendments, which can be either substantial or technical in nature. These changes could affect constituents’ positions on the bill. It is crucial for stakeholders to track the current version of the bill through contact with the District Office or by subscribing to updates on the California State Senate website.

Amendments are implemented by the printer, who ensures accuracy before the final version is presented for voting. Important dates and announcements regarding AB766 are available on the legislative calendar, which helps individuals monitor its progression and plan for participation in committee hearings.

In summary, AB766 is following the standard legislative process in California, involving committee hearings, proposed amendments, and ongoing discussion. By staying up-to-date with the bill’s progress, interested parties can remain informed and adjust their position if needed.

Impact on the California Cannabis Industry

The introduction of AB 766 has significant implications for various entities within the cannabis industry, such as the supply chain, distributor, and state license holders. The bill mandates that a licensee must pay for goods and services sold or transferred by another licensee within 15 days of the invoice date for the cannabis or cannabis products.

One of the primary effects of AB 766 is the potential increase in accountability and timely payments within the cannabis supply chain. This regulation ensures that businesses at each stage of the process – from cultivation to retail – receive compensation in a timely fashion, which could ultimately enhance the overall efficiency of the industry.

Distributors play a crucial role in the cannabis supply chain by ensuring the transportation, storage, and quality control of products. Under the new bill, they will benefit from the accelerated payment schedule, which may contribute to improved cash flow and overall financial stability. In turn, this could result in better collaboration between distributors and other entities, such as cultivators and retail outlets.

State-licensed marijuana businesses also stand to benefit from AB 766’s payment regulations. By enforcing a more structured timeline for invoice payments, financial planning and resource allocation may become more predictable for all parties involved. This increased transparency can ultimately result in a healthier, more well-regulated cannabis industry in California.

To summarize, the impact of AB 766 on the California cannabis industry is multifaceted, affecting various entities such as the supply chain, distributors, and state license holders. The bill aims to streamline payment structures, enhance overall efficiency, and improve financial stability for businesses within the cannabis sector.