Glossary

TERM DEFINITION
409A Section 409A of the Internal Revenue Code (IRC) applies to nonqualified deffered compensation. Under Section 409A, employees, consultants or board members can earn wages, bonuses, or other forms of compensation one year but recieve the earnings and pay income taxes during a later year.
83(B) Election The 83(b) election is a provision under the Internal Revenue Code (IRC) which allows you to elect to pay taxes on shares that have not fully vested. Paying taxes before the shares vest can potentially save you money if the value of the shares will increase later.
A-license Means a state license issued under this division for cannabis or cannabis products that are intended for adults 21 years of age and over and who do not possess physician’s recommendations.
A-licensee Means any person holding a license under this division for cannabis or cannabis products that are intended for adults 21 years of age and over and who do not possess physician’s recommendations.
Acceleration Equity arrangments between a company and its founders, employees or other constituent often contain an acceleration clause. The clause has a triggering event (e.g., the sale of the company), the occurence of which accelerates the vesting of the equityholder's equity in the company.
Acquhire A transaction where a company is purchased for the purpose of acquiring its employees, rather than the company's product and, or service.
Applicant Means an owner applying for a state license pursuant to this division
Batch Means a specific quantity of homogeneous cannabis or cannabis product that is one of the following types: Harvest batch. “Harvest batch” means a specifically identified quantity of dried flower or trim, leaves, and other cannabis plant matter that is uniform in strain, harvested at the same time, and, if applicable, cultivated using the same pesticides and other agricultural chemicals, and harvested at the same time. (2) Manufactured cannabis batch. “Manufactured cannabis batch” means either of the following: (A) An amount of cannabis concentrate or extract that is produced in one production cycle using the same extraction methods and standard operating procedures. (B) An amount of a type of manufactured cannabis produced in one production cycle using the same formulation and standard operating procedures.
Harvest batch Means a specifically identified quantity of dried flower or trim, leaves, and other cannabis plant matter that is uniform in strain, harvested at the same time, and, if applicable, cultivated using the same pesticides and other agricultural chemicals, and harvested at the same time.
Manufactured cannabis batch Means either of the following: (A) An amount of cannabis concentrate or extract that is produced in one production cycle using the same extraction methods and standard operating procedures. (B) An amount of a type of manufactured cannabis produced in one production cycle using the same formulation and standard operating procedures.
Bureau Means the Bureau of Cannabis Control within the Department of Consumer Affairs, formerly named the Bureau of Marijuana Control, the Bureau of Medical Cannabis Regulation, and the Bureau of Medical Marijuana Regulation.
Cannabis Means all parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. “Cannabis” also means the separated resin, whether crude or purified, obtained from cannabis. “Cannabis” does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this division, “cannabis” does not mean “industrial hemp” as defined by Section 11018.5 of the Health and Safety Code: means a fiber or oilseed crop, or both, that is limited to types of the plant Cannabis sativa L. having no more than three-tenths of 1 percent tetrahydrocannabinol (THC) contained in the dried flowering tops, whether growing or not; the seeds of the plant; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds or resin produced therefrom.
Cannabis accessories Has the same meaning as in Section 11018.2 of the Health and Safety Code: “Cannabis accessories” means any equipment, products or materials of any kind which are used, intended for use, or designed for use in planting, propagating, cultivating, growing, harvesting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, smoking, vaporizing, or containing cannabis, or for ingesting, inhaling, or otherwise introducing cannabis or cannabis products into the human body.
Cannabis concentrate Means cannabis that has undergone a process to concentrate one or more active cannabinoids, thereby increasing the product’s potency. Resin from granular trichomes from a cannabis plant is a concentrate for purposes of this division. A cannabis concentrate is not considered food, as defined by Section 109935 of the Health and Safety Code, or a drug, as defined by Section 109925 of the Health and Safety Code.
Cannabis products Has the same meaning as in Section 11018.1 of the Health and Safety Code: means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients.
Child resistant Means designed or constructed to be significantly difficult for children under five years of age to open, and not difficult for normal adults to use properly.
Commercial cannabis activity Includes the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of cannabis and cannabis products as provided for in this division.
Cultivation Means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis.
Cultivation site Means a location where cannabis is planted, grown, harvested, dried, cured, graded, or trimmed, or a location where any combination of those activities occurs.
Customer Means a natural person 21 years of age or over or a natural person 18 years of age or older who possesses a physician’s recommendation.
Day care center Has the same meaning as in Section 1596.76 of the Health and Safety Code: means any child day care facility other than a family day care home, and includes infant centers, preschools, extended day care facilities, and schoolage child care centers.
Delivery Means the commercial transfer of cannabis or cannabis products to a customer. “Delivery” also includes the use by a retailer of any technology platform owned and controlled by the retailer.
Director Means the Director of Consumer Affairs.
Distribution Means the procurement, sale, and transport of cannabis and cannabis products between licensees.
Dried flower Means all dead cannabis that has been harvested, dried, cured, or otherwise processed, excluding leaves and stems.
Edible cannabis product Means cannabis product that is intended to be used, in whole or in part, for human consumption, including, but not limited to, chewing gum, but excluding products set forth in Division 15 (commencing with Section 32501) of the Food and Agricultural Code. An edible cannabis product is not considered food, as defined by Section 109935 of the Health and Safety Code, or a drug, as defined by Section 109925 of the Health and Safety Code.
Fund Means the Cannabis Control Fund established pursuant to Section 26210.
Kind Means applicable type or designation regarding a particular cannabis variant or cannabis product type, including, but not limited to, strain name or other grower trademark, or growing area designation.
Labeling Means any label or other written, printed, or graphic matter upon a cannabis product, upon its container or wrapper, or that accompanies any cannabis product.
Labor peace agreement Means an agreement between a licensee and any bona fide labor organization that, at a minimum, protects the state’s proprietary interests by prohibiting labor organizations and members from engaging in picketing, work stoppages, boycotts, and any other economic interference with the applicant’s business. This agreement means that the applicant has agreed not to disrupt efforts by the bona fide labor organization to communicate with, and attempt to organize and represent, the applicant’s employees. The agreement shall provide a bona fide labor organization access at reasonable times to areas in which the applicant’s employees work, for the purpose of meeting with employees to discuss their right to representation, employment rights under state law, and terms and conditions of employment. This type of agreement shall not mandate a particular method of election or certification of the bona fide labor organization.
License Means a state license issued under this division, and includes both an A-license and an M-license, as well as a testing laboratory license.
Licensee Means any person holding a license under this division, regardless of whether the license held is an A-license or an M-license, and includes the holder of a testing laboratory license.
Licensing authority Means the state agency responsible for the issuance, renewal, or reinstatement of the license, or the state agency authorized to take disciplinary action against the licensee.
Live plants Means living cannabis flowers and plants, including seeds, immature plants, and vegetative stage plants.
Local jurisdiction Means a city, county, or city and county.
Lot Means a batch or a specifically identified portion of a batch.
M-license Means a state license issued under this division for commercial cannabis activity involving medicinal cannabis.
M-Licensee Means any person holding a license under this division for commercial cannabis activity involving medicinal cannabis.
Manufacture Means to compound, blend, extract, infuse, or otherwise make or prepare a cannabis product.
Manufacturer Means a licensee that conducts the production, preparation, propagation, or compounding of cannabis or cannabis products either directly or indirectly or by extraction methods, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis at a fixed location that packages or repackages cannabis or cannabis products or labels or relabels its container.
Medical cannabis or medicinal cannabis product Means cannabis or a cannabis product, respectively, intended to be sold for use pursuant to the Compassionate Use Act of 1996 (Proposition 215), found at Section 11362.5 of the Health and Safety Code, by a medicinal cannabis patient in California who possesses a physician’s recommendation.
Nursery Means a licensee that produces only clones, immature plants, seeds, and other agricultural products used specifically for the propagation and cultivation of cannabis.
Operation Means any act for which licensure is required under the provisions of this division, or any commercial transfer of cannabis or cannabis products.
Owner Means any of the following: (1) A person with an aggregate ownership interest of 20 percent or more in the person applying for a license or a licensee, unless the interest is solely a security, lien, or encumbrance. (2) The chief executive officer of a nonprofit or other entity. (3) A member of the board of directors of a nonprofit. (4) An individual who will be participating in the direction, control, or management of the person applying for a license.
Package Means any container or receptacle used for holding cannabis or cannabis products.
Person Includes any individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular.
Physician's recommendation Means a recommendation by a physician and surgeon that a patient use cannabis provided in accordance with the Compassionate Use Act of 1996 (Proposition 215), found at Section 11362.5 of the Health and Safety Code.
Premises Means the designated structure or structures and land specified in the application that is owned, leased, or otherwise held under the control of the applicant or licensee where the commercial cannabis activity will be or is conducted. The premises shall be a contiguous area and shall only be occupied by one licensee.
Purchaser Means the customer who is engaged in a transaction with a licensee for purposes of obtaining cannabis or cannabis products.
Sell, sale, and to sell Include any transaction whereby, for any consideration, title to cannabis or cannabis products is transferred from one person to another, and includes the delivery of cannabis or cannabis products pursuant to an order placed for the purchase of the same and soliciting or receiving an order for the same, but does not include the return of cannabis or cannabis products by a licensee to the licensee from whom the cannabis or cannabis product was purchased.
Testing laboratory Means a laboratory, facility, or entity in the state that offers or performs tests of cannabis or cannabis products and that is both of the following: (1) Accredited by an accrediting body that is independent from all other persons involved in commercial cannabis activity in the state. (2) Licensed by the bureau.
Unique identifier Means an alphanumeric code or designation used for reference to a specific plant on a licensed premises and any cannabis or cannabis product derived or manufactured from that plant.
Youth center Has the same meaning as in Section 11353.1 of the Health and Safety Code: means any public or private facility that is primarily used to host recreational or social activities for minors, including, but not limited to, private youth membership organizations or clubs, social service teenage club facilities, video arcades, or similar amusement park facilities.
Type 1, or “specialty outdoor” For outdoor cultivation using no artificial lighting of less than or equal to 5,000 square feet of total canopy size on one premises, or up to 50 mature plants on noncontiguous plots.
Type 1A, or “specialty indoor” For indoor cultivation using exclusively artificial lighting of between 501 and 5,000 square feet of total canopy size on one premises.
Type 1B or “specialty mixed-light” For cultivation using a combination of natural and supplemental artificial lighting at a maximum threshold to be determined by the licensing authority, of between 2,501 and 5,000 square feet of total canopy size on one premises.
Type 1C, or “specialty cottage” For cultivation using a combination of natural and supplemental artificial lighting at a maximum threshold to be determined by the licensing authority, of 2,500 square feet or less of total canopy size for mixed-light cultivation, up to 25 mature plants for outdoor cultivation, or 500 square feet or less of total canopy size for indoor cultivation, on one premises.
Type 2, or “small outdoor” For outdoor cultivation using no artificial lighting between 5,001 and 10,000 square feet, inclusive, of total canopy size on one premises.
Type 2A, or “small indoor” For indoor cultivation using exclusively artificial lighting between 5,001 and 10,000 square feet, inclusive, of total canopy size on one premises.
Type 2B, or “small mixed-light” For cultivation using a combination of natural and supplemental artificial lighting at a maximum threshold to be determined by the licensing authority, between 5,001 and 10,000 square feet, inclusive, of total canopy size on one premises.
Type 3, or “outdoor” For outdoor cultivation using no artificial lighting from 10,001 square feet to one acre, inclusive, of total canopy size on one premises. The Department of Food and Agriculture shall limit the number of licenses allowed of this type.
Type 3A, or “indoor” For indoor cultivation using exclusively artificial lighting between 10,001 and 22,000 square feet, inclusive, of total canopy size on one premises. The Department of Food and Agriculture shall limit the number of licenses allowed of this type.
Type 3B, or “mixed-light” For cultivation using a combination of natural and supplemental artificial lighting at a maximum threshold to be determined by the licensing authority, between 10,001 and 22,000 square feet, inclusive, of total canopy size on one premises. The Department of Food and Agriculture shall limit the number of licenses allowed of this type.
Type 4, or “nursery” For cultivation of cannabis solely as a nursery.
Type 5, or “outdoor” Means for outdoor cultivation using no artificial lighting greater than one acre, inclusive, of total canopy size on one premises.
Type 5A, or “indoor” Means for indoor cultivation using exclusively artificial lighting greater than 22,000 square feet, inclusive, of total canopy size on one premises.
Type 5B, or “mixed-light” Means for cultivation using a combination of natural and supplemental artificial lighting at a maximum threshold to be determined by the licensing authority, greater than 22,000 square feet, inclusive, of total canopy size on one premises.
Type 6—Manufacturer 1 “Manufacturing Level 1,” for sites that manufacture cannabis products using nonvolatile solvents, or no solvents. A Manufacturing Level 1 M-Type 6 licensee shall only manufacture cannabis products for sale by a retailer with an M-Type 10 license.
Type 7—Manufacturer 2 “Manufacturing Level 2,” for sites that manufacture cannabis products using volatile solvents. A Manufacturing Level 2 M-Type 7 licensee shall only manufacture cannabis products for sale by a retailer with an M-Type 10 license.
Type 10—Retailer “Retailer,” for the retail sale and delivery of cannabis or cannabis products to customers. A retailer shall have a licensed premises which is a physical location from which commercial cannabis activities are conducted. A retailer’s premises may be closed to the public. A retailer may conduct sales exclusively by delivery.
Type 11—Distributor “Distributor,” for the distribution of cannabis and cannabis products. A distributor licensee shall be bonded and insured at a minimum level established by the licensing authority.
Type 12—Microbusiness “Microbusiness,” for the cultivation of cannabis on an area less than 10,000 square feet and to act as a licensed distributor, Level 1 manufacturer, and retailer under this division, provided such licensee can demonstrate compliance with all requirements imposed by this division on licensed cultivators, distributors, Level 1 manufacturers, and retailers to the extent the licensee engages in such activities. Microbusiness licenses that authorize cultivation of cannabis shall include the license conditions described in subdivision (b) of Section 26060.1.
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