Online marketplaces: illicit cannabis: reporting and liability.

Senator Wiener's cannabis marketplace legislation requires online platforms facilitating cannabis and hemp sales to implement strict verification protocols and reporting mechanisms for unlicensed sellers, while establishing new liability frameworks for platforms that enable illegal transactions.

The bill mandates that online cannabis and hemp marketplaces clearly disclose whether they verify seller licenses and requires them to create accessible reporting systems for users to flag unlicensed vendors. These reporting mechanisms must provide confirmation within 36 hours, regular status updates, and final determinations within 30 days. Platforms that do not verify licenses must display prominent warnings about the risks of purchasing from unlicensed sellers, including potential contamination and child safety concerns.

The legislation creates a strict liability standard for online marketplaces that engage in paid advertising of unlicensed cannabis sellers or unregistered hemp products. Platforms deemed a substantial factor in illegal transactions face liability for consumer damages comparable to retailers selling defective products. The bill allows for enhanced damages - double in standard cases where platforms knew or should have known about unlicensed status, and triple in cases involving harm to children.

Multiple parties can bring civil enforcement actions under the bill, including individuals who submit reports, parents of affected minors, labor unions representing licensed cannabis workers, local prosecutors, the Attorney General, and licensed sellers. Violations carry penalties up to $10,000 per day of non-compliance, along with potential compensatory and punitive damages. Platforms that violate injunctions may be barred from operating in California until a court-appointed receiver confirms compliance.