No More “Dispensary Fees”: California’s Junk‑Fee Law Hits Cannabis and THC Drinks in 2025

Overview: California SB 478 and Its Profound Impact on Cannabis & THC Beverage Pricing in 2025

Beginning July 1, 2024, California’s SB 478, known as the “Honest Pricing” or "Hidden Fees" law, has redefined cannabis retail—and the wider world of consumer pricing. For the state’s cannabis dispensaries, hemp shops, and THC beverage retailers, this landmark regulation is more than just a minor adjustment: it represents a seismic shift in how all-in pricing must be presented to consumers, both in-store and online.

The law’s explicit goal? Eliminate hidden or junk fees that inflate the consumer’s total at checkout—a move that responds to mounting complaints (and enforcement actions) regarding so-called “service,” "compliance," and "platform" fees that appeared late in the transaction process.

For cannabis operators, SB 478’s compliance obligations—and legal risks—are significant. Failing to get this right could expose businesses to lawsuits under California’s Consumer Legal Remedies Act (CLRA), investigations by the Attorney General, and city attorney enforcement actions. As enforcement ramps up through 2025, understanding and addressing these requirements is essential for every cannabis licensee.

What Does SB 478 Require? Key Takeaways for Cannabis Businesses

SB 478 (Honest Pricing/Hidden Fees Law) requires that any advertised price for a good or service must include all mandatory fees and charges, other than government-imposed taxes and (for shipped goods) shipping costs.

For cannabis and hemp retailers, this new clarity means:

• Any price shown on shelf tags, printed or digital menus, online product listings, and e-commerce checkout pages must reflect the total price a consumer is required to pay, except for excise/sales tax and shipping where applicable.
• Non-tax, mandatory “service fees,” “compliance fees,” “technology fees,” delivery surcharges, or platform add-ons that previously appeared as separate line items at checkout must now be embedded in the price displayed, not added after-the-fact.
• Optional fees, such as tips or upgraded delivery, do not need to be included in the displayed price—but must be clearly designated as "optional."

Refer directly to the California Attorney General’s SB 478 FAQ (PDF) and Hidden Fees resource page for more legal details.

What’s No Longer Allowed? Real-World Examples

No More Drip Pricing on Cannabis Menus

"Drip pricing"—where a business advertises one price then reveals additional non-tax mandatory charges at checkout—is specifically banned by SB 478. In cannabis retail, this means:

• “$35 Eighth” advertised, plus a $5 "service fee" at payment = ILLEGAL
• Checkout adding “delivery fee” or “compliance charge” after menu price = ILLEGAL
• Platform or ordering tech fees not disclosed up-front = ILLEGAL
• Sales/Excise tax may be shown as a separate line, but all other non-government charges must be included in the single displayed price

Key Exception: Government Taxes & Shipping

• Retail cannabis excise tax and state/local sales taxes may still be shown as separate lines at checkout or receipt, per SB 478 and AG guidance.
• Shipping costs (for hemp products delivered out-of-state, when permitted) may also be listed separately.

Enforcement: Lawsuits, Penalties, and Ongoing Scrutiny

Risks for Non-Compliance Are Substantial:

• Consumers and city attorneys can bring enforcement actions: The law is enforceable both by the California Attorney General and by city and county attorneys, and individual consumers can sue under the CLRA.
• Expect active enforcement: In July-August 2024, multiple consumer complaints and city attorney warnings were issued to cannabis and hemp beverage retailers about illegal drip pricing structures (see reporting). Expect enforcement to accelerate through 2025.
• Civil Penalties, Injunctions, and Refunds: Remedies may include civil penalties, injunctive orders ceasing sales, and mandatory consumer refunds.

Key Compliance Takeaway for Cannabis Businesses: “Shelf tag price, menu price, and cart price all need to match—and reflect the true amount a customer must pay at checkout, exclusive only of government taxes and shipping.”

How: Steps to Comply with SB 478 in Cannabis & THC Beverage Retail

1. Audit Your Pricing and Checkout Flows Now

Run reviews of:

• POS system and menu boards (in-store and online)
• E-commerce checkout processes (including cannabis delivery platforms)
• Shelf tag and sticker processes

Confirm that the first price a consumer sees is the true all-in price (excluding only taxes and shipping). Eliminate any line-item, non-tax mandatory surcharges from appearing later in the checkout flow.

2. Coordinate With Your Tech Vendors

Many cannabis point-of-sale (POS) and menu solutions were designed around “subtotal + fees + taxes” structures. SB 478 may require system or API updates for compliance. Ensure menu boards, digital platforms, and third-party marketplace integrations all follow California’s new all-in pricing rule.

3. Update Your Staff and Customer Communications

Train all staff on what to say if questioned about prices. Update any disclosures, receipts, or posted notices to reflect compliant pricing ("all prices include required fees; tax added at checkout").

4. Document and Record Your Changes

Maintain records of pricing updates, vendor communications, and compliance checks. If enforcement arises, documentation of proactive compliance steps is your best shield.

What About THC Beverages in Liquor Stores or Online? (Hemp Derived)

For businesses marketing hemp-derived or low-THC beverages in off-premise retail, the law applies in the same manner. Prices on digital menus, shelf tags, online carts, and order receipts must include all non-tax, mandatory fees. Any attempt to "add" a "platform fee" or similar at checkout is likely non-compliant.

For regulatory overlap with the Department of Cannabis Control (DCC) or Alcoholic Beverage Control (ABC), prioritize the stricter pricing clarity standard. For details, see California DCC Retailer Guidance and CannabisRegulations.ai guidance for THC drinks.

Practical Compliance Checklist for 2025

• Price advertised on menu, shelf, or online = total required payment, exclusive of only taxes and/or shipping
• No separate line-item surcharges for "compliance," "service," "delivery," or "platform" fees
• Taxes and shipping (where permitted) may be listed separately
• Document all pricing audits and staff training
• Update all menu boards, POS software, and e-commerce flows
• Monitor city attorney guidance and enforcement updates through 2025

Why This Matters: A New Era of Consumer Transparency—and Business Risk

SB 478 is intended to restore consumer trust by banning "drip pricing" and surprise add-on fees.

• For businesses: Rapid adaptation is required; legacy pricing systems and business models based on "fees" must change—or be prepared to face legal action.
• For consumers: Shopping for cannabis or THC beverages in California is now more transparent: aside from government taxes, the price you see should be the price you pay.

Final Thoughts and Next Steps

As enforcement advances in 2025, California cannabis retailers and THC-infused beverage sellers must treat SB 478 compliance as a business-critical issue. Failing to comply is likely to result not only in state or local investigation, but also private lawsuits.

Now is the time to:

• Audit all pricing displays and systems
• Train staff
• Communicate with tech vendors
• Stay alert for further guidance from the DCC, the Attorney General, and city attorneys

For ongoing compliance insights and actionable updates tailored to your sector, visit CannabisRegulations.ai. Stay proactive, not reactive, in fulfilling the new pricing obligations under SB 478.