(a)For purposes of this section, the following definitions apply:
(1)“Business information” means an internet website, mobile application, address, or telephone number through which a seller offers to sell, or a consumer makes a purchase of, a product.
(2)“Cannabis” has the same meaning as that term is defined in subdivision (f) of Section 26001 of the Business and Professions Code.
(3)“Cannabis product” has the same meaning as that term is defined in subdivision (k) of Section 26001 of the Business and Professions Code.
(4)“Intoxicating hemp product” has the same meaning as that term is defined in Section 22944 of the Business and Professions Code.
(5)“Licensed” means licensed pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code.
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(a)
For purposes of this section, the following definitions apply:
(1)
“Business information” means an internet website, mobile application, address, or telephone number through which a seller offers to sell, or a consumer makes a purchase of, a product.
(2)
“Cannabis” has the same meaning as that term is defined in subdivision (f) of Section 26001 of the Business and Professions Code.
(3)
“Cannabis product” has the same meaning as that term is defined in subdivision (k) of Section 26001 of the Business and Professions Code.
(4)
“Intoxicating hemp product” has the same meaning as that term is defined in Section 22944 of the Business and Professions Code.
(5)
“Licensed” means licensed pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code.
(6)
“Online marketplace” means an online cannabis marketplace, as that term is defined in Section 22943 of the Business and Professions Code, or an online hemp marketplace, as that term is defined in Section 22944 of the Business and Professions Code.
(7)
“Unlawful
paid online advertising” means an advertisement or promotional information displayed on a computer or mobile device about, or for an offer of, the sale of cannabis or a cannabis product by an unlicensed seller, or an intoxicating hemp product, for which an online marketplace receives compensation either directly from a business or indirectly by increasing the number of individuals who visit the marketplace.
(b)
(1)
An online marketplace shall not engage in
unlawful paid online advertising related to unlicensed sellers of cannabis or cannabis products or intoxicating hemp products.
(2)
An online marketplace that engages in unlawful paid online advertising related to unlicensed sellers of cannabis or cannabis products in violation of paragraph (1) and is a substantial factor in an unlawful transaction between a consumer and an unlicensed seller of cannabis or a cannabis product shall be jointly and severally liable for all damages caused to the consumer by the ingestion of the cannabis or cannabis product.
(3)
An online marketplace that engages in unlawful paid online advertising related to sellers of intoxicating hemp products in violation of paragraph (1) and is a substantial factor in an unlawful transaction between a consumer and a seller of an intoxicating hemp product shall be jointly and severally liable for all damages caused to the consumer by the ingestion of the intoxicating hemp product.
(c)
(1)
Except as provided in subdivision (d), in an action brought pursuant to paragraph (2) of subdivision (b) for harm to a consumer caused by the ingestion of cannabis or a cannabis product purchased from an unlicensed seller of cannabis products, a prevailing plaintiff may, in addition to any other remedy at law, recover as a civil penalty up to two times the damages caused by the cannabis or cannabis product if the online marketplace
had actual knowledge that the seller that offered the cannabis or cannabis product was not licensed. For purposes of this paragraph, receipt of a report pursuant to Section 22943.2 or 22944.2 of the Business and Professions Code may be a basis for obtaining knowledge.
(2)
Except as provided in subdivision (d), in an action brought pursuant to paragraph (3) of subdivision (b) for harm to a consumer caused by the ingestion of an intoxicating hemp
product, a prevailing plaintiff may, in addition to any other remedy at law, recover as a civil penalty up to two times the damages caused by the intoxicating hemp product if the online marketplace had actual knowledge that the product was an intoxicating hemp product. For purposes of this paragraph, receipt of a report pursuant to Section 22943.2 or 22944.2 of the Business and Professions Code may be a basis for obtaining knowledge.
(d)
(1)
In an action described in paragraph (1) of subdivision (c), a prevailing plaintiff may, in addition to any other remedy at law, recover as a civil penalty up to three times the damages suffered by a child caused by the ingestion of cannabis or a cannabis product if the online marketplace had actual knowledge at the time the marketplace facilitated the connection that the seller that offered the cannabis or cannabis product was not licensed.
For purposes of this paragraph, receipt of a report pursuant to Section 22943.2 or 22944.2 of the Business and Professions Code may be a basis for obtaining knowledge.
(2)
In an action described in paragraph (2) of subdivision (c), a prevailing plaintiff may, in addition to any other remedy at law, recover as a civil penalty up to three times the damages suffered by a child caused by the ingestion of the intoxicating hemp product if the online marketplace
had actual knowledge at the time the marketplace facilitated the connection that the product was an intoxicating hemp product. For purposes of this paragraph, receipt of a report pursuant to Section 22943.2 or 22944.2 of the Business and Professions Code may be a basis for obtaining knowledge.
(e)
This section shall not be construed as applying to information or content displayed by a business on a computer or mobile device when the content does not satisfy the definition of
unlawful paid online advertisement.
(f)
(1)
In a civil action brought pursuant to
subdivision (b), (c), or (d) against an online marketplace in relation to cannabis or cannabis products, it is a complete affirmative defense if the online marketplace establishes, by clear and convincing evidence, all of the following:
(A)
The online marketplace had, at the time the allegedly harmful product was sold, in full force and effect, a policy and practice of verifying that each seller of cannabis or cannabis products had a license.
(B)
The seller had a valid, unexpired license at the time of the sale.
(C)
The online marketplace never had custody or control of the cannabis or cannabis product.
(2)
In a
civil action brought pursuant to subdivision (b), (c), or (d) against an online marketplace in relation to intoxicating hemp products, it is a complete affirmative defense if the online marketplace establishes, by clear and convincing evidence, all of the following:
(A)
The defendant had, at the time the allegedly harmful product was sold, in full force and effect, a policy and practice of requiring offers to sell a product containing hemp to describe the product as “THC free” or “nonintoxicating,” or
to contain that statement “[Insert online marketplace name] does not permit the sale of intoxicating hemp,”
where those words appear in the largest text visible to the public describing or identifying the product and are either of the following:
(i)
In the same size and style as the largest text visible to the public describing or identifying the product.
(ii)
Clearly and conspicuously disclosed as a part of the largest text visible to the public describing or identifying the product.
(B)
The disclosure described by subparagraph (A) existed at the time the product was sold to the consumer.
(C)
The defendant never had custody or control of the product.
(3)
In a civil action brought pursuant to subdivision (b), (c), or (d) against an online marketplace in relation to intoxicating hemp products, it is a complete affirmative defense if the online marketplace establishes, by clear and convincing evidence, all of the following:
(A)
The defendant did not know or should not have known from the information it obtained from the seller, including the description of the product, that the hemp was intoxicating.
(B)
The defendant never had custody or control of the allegedly harmful product.
(4)
In a civil action brought pursuant to subdivision (b), (c), or (d) against an online marketplace in relation to intoxicating hemp products, it is a complete affirmative defense if the online marketplace establishes, by clear and convincing evidence, all of the following:
(A)
The defendant received a report pursuant to the mechanism required by Section
22944.2 of the Business and Professions Code that the seller of the intoxicating hemp product alleged to have caused the injury was selling intoxicating hemp.
(B)
Prior to the sale of the intoxicating hemp product alleged to have caused the injury, the defendant did either of the following:
(i)
Required the disclosure described in paragraph
(2).
(ii)
Removed the seller from their marketplace.
(5)
(A)
In a civil action brought pursuant to subdivisions (b), (c), or (d) against an online marketplace in relation to intoxicating hemp products, it is a complete affirmative defense if the online marketplace establishes, by clear and convincing evidence, that the marketplace did either of the following:
(i)
Prior to the action being filed, within 48 hours of the online marketplace knowing it was violating paragraph (1) of
subdivision (b), removed the product description that offered the intoxicating hemp that is alleged to have caused the harm from the marketplace, and the product description remained removed from the marketplace without interruption until the time the action was filed.
(ii)
Prior to the action being filed, within 48 hours of the online marketplace knowing it was violating paragraph (1) of subdivision (b), inserted or caused to be inserted into the product description of the product that is alleged to have caused the harm disclosures that describe the product as “THC free” or “nonintoxicating,” or “[Insert marketplace name] does not permit the sale of intoxicating hemp,” where the words “THC free” or “nonintoxicating” or “[Iinsert marketplace name] does not permit the sale of intoxicating hemp,” appear in the largest text visible to the public describing or identifying the product, those words appeared on the product description without
interruption until the time the action was filed, and those words are either of the following:
(I)
In the same size and style as the largest text visible to the public describing or identifying the product.
(II)
Clearly and conspicuously disclosed as a part of the largest text visible to the public describing or identifying the product.
(B)
For purposes of this paragraph, receipt of a report pursuant to Section 22943.2 or 22944.2 of the Business and Professions Code may be a basis for obtaining knowledge.
(g)
In any action brought pursuant to this section, an online marketplace may, notwithstanding any provision in an agreement or contract, seek in the same action indemnification against an advertiser
of cannabis, cannabis products, or intoxicating hemp products that misrepresented to the online marketplace that they were licensed or registered to sell that product, or misrepresented to the online marketplace that they were a seller of nonintoxicating hemp.
(h)
This section shall become operative on July 1, 2026.