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California's AB 2537 Advances Unanimously Out of Assembly Business & Professions Committee
- Apr 15
- 3 min read
On April 14, 2026, Assembly Bill 2537, the Cannabis Enforcement Accountability and Public Health Prioritization Act of 2026, passed the Assembly Business and Professions Committee with unanimous support on a 19–0 vote.
Authored by Phil Chen, this marks an important milestone for the California Cannabis Operators Association (CaCOA) and the broader regulated cannabis industry.
At its core, AB 2537 advances a simple but critical principle: enforcement resources should be aligned with real-world risk.
As proposed to be amended, the bill establishes a clear, risk-based enforcement framework requiring the Department of Cannabis Control (DCC) to prioritize enforcement and disciplinary actions based on the risk of harm, defined as conduct, practices or conditions that are reasonably expected to interfere with the enforcement of any state law, involve false, misleading or deceptive business practices, and adversely affect the public or environment.
As Assemblymember Chen noted in his testimony:
“AB 2537 strengthens public health protections by prioritizing enforcement by the DCC against contaminated and unsafe cannabis products. Our bill bolsters legal market integrity and provides clear statutory guidance to the DCC to encourage strategic use of limited enforcement resources.”
Why This Bill Matters
California’s illicit market continues to dominate the landscape, accounting for an estimated 60% of cannabis activity statewide.
At the same time, licensed operators, who have invested heavily in compliance, pay taxes, and operate within the regulatory framework, are increasingly subject to enforcement actions focused on minor or technical violations.
That dynamic is not sustainable.
As CaCOA’s President, Alex Freedman, noted in his testimony:
“That is not how you win the war against the illicit market. That is how you exhaust the people fighting on your side.”
AB 2537 addresses this imbalance directly: not by limiting enforcement authority, but by providing clear statutory direction on how enforcement should be prioritized.
What the Bill Does
AB 2537 establishes a three-tiered framework for violations:
Serious violations: significant risks to public health and safety (e.g., unlicensed activity, sales to minors, product safety failures, environmental harm)
Moderate violations: real but less immediate risks (e.g., negligent recordkeeping, workplace violations, mislabeling unlikely to cause harm)
Minor violations: technical or administrative issues with negligible harm
The bill directs the DCC to prioritize enforcement accordingly, focusing first on the most serious threats. It also requires the DCC to adopt and publish an enforcement prioritization policy that:
Aligns staffing and resources with risk
Establishes clear enforcement categories and responses
Improves transparency by documenting enforcement actions across violation types
Importantly, the bill preserves the DCC’s full authority to enforce all violations. It simply ensures that limited resources are directed where they will have the greatest impact.
A Framework the Legislature Intended
In presenting the bill, our Executive Director, Amy O’Gorman Jenkins, emphasized that this approach reflects longstanding legislative intent:
“Having worked on cannabis policy implementation in California for many years, and having spent considerable time before this Committee, I can say with confidence: this is precisely the kind of framework the Legislature intended.”
What Comes Next
With unanimous committee support, AB 2537 now moves forward in the legislative process.
While there is still work ahead, the 19–0 vote signals strong bipartisan recognition that enforcement must be focused on what matters most: public health, youth protection, product safety, and the illicit market.
We will continue to work closely with the author, committee staff, and stakeholders as the bill advances.
AB 1826: A Complementary Approach
Also advancing unanimously out of committee was AB 1826 (Lackey), which makes targeted improvements to the DCC's enforcement.
The bill focuses on due process, transparency, and timelines by:
Providing licensees an early opportunity to engage with regulators (“meet and confer”) before major enforcement actions proceed
Requiring clearer, evidence-based notices from the state
Establishing timelines for recalls, embargoes, and product condemnation
Prohibiting the use of liability or appeal waivers as a condition of resolution
Creating greater structure and accountability in enforcement decision-making
Taken together, AB 1826 functions as a practical companion to AB 2537. While AB 2537 establishes a forward-looking, risk-based enforcement framework, AB 1826 improves the integrity and fairness of the existing enforcement process by bringing greater transparency, consistency, and procedural clarity to decision-making and implementation.
Bottom Line for Members
This is about protecting the integrity of the legal market.
AB 2537 ensures that those doing the right thing are not disproportionately burdened, while prioritizing the most serious threats to public health and safety.
We are grateful to our members for continuing to share real-world examples that helped shape this effort, and we will keep you updated as both bills move forward.
