Online marketplaces: illicit cannabis: reporting and liability.
Impact
If enacted, SB 378 will significantly modify existing laws under the Business and Professions Code concerning cannabis sales and advertising. It will impose joint and several liability on online platforms for damages resulting from illegal transactions between unlicensed sellers and consumers unless certain conditions are met. This shift not only aims to hold online marketplaces accountable for facilitating illicit sales but also enhances consumer protections against potentially harmful products sold without proper regulation and oversight.
Summary
Senate Bill 378, introduced by Senator Wiener, aims to establish stricter regulations for online marketplaces facilitating the sale of cannabis and hemp products. Scheduled to take effect on July 1, 2026, the bill mandates that online cannabis marketplaces must verify the licenses of sellers, openly disclose whether they allow advertisements for unlicensed sellers, and create accessible reporting mechanisms for consumers to report violations. This aims to combat the burgeoning illicit cannabis market that often exploits consumers, particularly in light of the confusion surrounding legal and illegal cannabis sales.
Sentiment
The reception of SB 378 seems to vary among stakeholders. Supporters argue that these measures are necessary to ensure consumer safety and curb the distribution of unregulated and potentially harmful products via online platforms. They believe that the bill will effectively address the public safety concerns surrounding the unregulated cannabis market. Conversely, critics may express concerns about the administrative burden that such regulations may place on legitimate online marketplaces and the potential for an overreach in regulatory measures that may have unintended consequences.
Contention
A major point of contention arises from the balance between consumer safety and the operational feasibility for online marketplaces. While the bill aims to provide stronger consumer protection against unlicensed sellers, detractors warn that stringent regulations may inadvertently push some legitimate businesses out of the market or lead to increased costs for consumers. Additionally, the defined penalties for non-compliance, which can reach substantial amounts, raise concerns about the implications for online businesses that seek to navigate the complex landscape of cannabis sales.