California 2025: SB 378 Puts Online Marketplaces On the Hook for Cannabis License Verification and Illicit Hemp Sellers

California SB 378: A New Era of Online Cannabis & Hemp Marketplace Compliance in 2025

As California’s cannabis and hemp industries continue to mature, regulatory oversight adapts to emerging risks—especially as sales shift steadily online. Now, California SB 378 (2025–2026 legislative session) is poised to enact sweeping requirements for any online marketplace or app facilitating cannabis or hemp transactions. If adopted, SB 378 would change the compliance landscape for e-commerce, delivery services, and mainstream platforms—impacting license verification, reporting obligations, and consumer awareness.

What Does SB 378 Require of Online Marketplaces?

SB 378 aims to fill gaps in online oversight by requiring websites and apps that list or sell cannabis or hemp products—including delivery apps, online marketplaces, and social commerce integrations—to:

• Verify sellers' cannabis or hemp licenses using state-validated databases (e.g., DCC, CDPH for cannabis; CDFA/USDA for hemp).
• Clearly disclose to consumers when a seller’s license status has not been confirmed, with a prominent warning on the platform.
• Implement a public reporting mechanism for users to flag illicit or unlicensed listings, accompanied by prompt review and takedown procedures.
• Maintain records and audit trails of license checks and takedown activity for regulatory inspection.

These requirements would represent a significant expansion of compliance obligations—especially for platforms that, until now, may have only minimally engaged with regulatory vetting or actively allowed hemp SKUs as standard consumer packaged goods.

Key Takeaway

SB 378’s core goal is to prevent unlicensed cannabis and illicit hemp products from reaching California consumers via online platforms—shifting some regulatory burden from individual sellers to the marketplaces and delivery services themselves.

License Verification Workflows: No More "Ignorance is Bliss"

If SB 378 passes, “marketplaces” will need:

• Automated license lookup tools: Platforms must cross-check ALL sellers of cannabis/hemp products against state-maintained lists (such as the California DCC cannabis license search, or USDA/CDFA hemp registries).
• Real-time monitoring: Listings must be dynamically verified and actively monitored for license changes, expirations, or revocations.
• Flagging & disclosures: When a seller cannot be verified, the marketplace must attached a clear, consumer-facing warning (such as “License Unknown—Seller May Not Be Authorized.”)
• Recordkeeping/Audit logs: Compliance teams must keep timestamped logs of all checks, disclosures, and takedown activity—readily available for regulatory review by the Department of Cannabis Control or related agencies.

This is a step-change from today’s status quo, where many platforms simply collect a seller’s self-attestation or ignore hemp compliance altogether. Platforms will need to build and maintain workflow integrations with official regulatory databases, or risk enforcement action.

Hemp Products: No Longer a Loophole

One of SB 378’s striking aspects is its explicit inclusion of hemp products—not just THC-rich cannabis. Since passage of the federal 2018 Farm Bill, hemp-derived cannabinoids such as CBD, delta-8, and HHC have proliferated across online sales channels, often without much regulatory scrutiny.

SB 378 would require all platforms selling either cannabis or hemp products to:

• Apply the same verification, disclosure, and reporting protocols to hemp SKUs.
• Review the licensing status of hemp product manufacturers and sellers (checking for registration with the California Department of Public Health or the appropriate federal agency).
• Treat noncompliant hemp listings as reportable/takedown items, not ordinary consumer packaged goods.

This closes a gap that many e-commerce engines have previously exploited—assuming that hemp SKUs don’t trigger the same rules as state-licensed cannabis.

Takedown Procedures & Consumer Reporting

A major part of compliance under SB 378 is empowering the public to report potentially illicit product listings. Marketplaces, delivery services, and hosting platforms must:

• "Implement prominent reporting buttons or links" near all cannabis/hemp product listings for public use; these must be easy to access and initiate.
• Promptly review all consumer-submitted reports (within timeframes established by forthcoming DCC regulations).
• Document and take down listings that cannot be verified or appear to violate state law.
• Maintain internal logs of report resolution actions—with detailed timestamps and outcomes for regulatory audits.

Many legacy platforms and new e-commerce engines will require major upgrades to support these workflows (not just checkboxes or email addresses).

Who Is Impacted by SB 378?

If enacted, SB 378 touches an array of market players:

1. Mainstream E-Commerce Engines

Sites like Shopify, WooCommerce integrations, and large social platforms listing cannabis- or hemp-derived products for California consumers will be on the hook.

2. Delivery Marketplaces

Prominent delivery services (e.g., Eaze, Weedmaps, Emjay, Dutchie) will need to document real-time license verifications for all third-party sellers and take swift action on flagged entries.

3. Social Commerce & Niche Marketplaces

Instagram shops, Facebook Marketplace, Telegram, and even Discord-based e-commerce channels must build these compliance features.

4. Retailers & Brands

Dispensaries, online stores, and direct-to-consumer brands should expect additional diligence requirements by platforms or risk delisting.

5. Hemp & CBD Operators

Hemp SKUs—particularly those using novel cannabinoids—will face the same scrutiny as their cannabis counterparts.

The broad definitions in SB 378 ensure most digital platforms cannot simply "opt out" by claiming ignorance or shifting the burden solely to sellers.

Enforcement & Penalties

While detailed enforcement mechanisms will be established as DCC clarifies the rules, expect:

• Administrative citations and significant fines for noncompliant platforms.
• Takedown orders for persistent violators.
• Business license revocations for licensed platforms enabling unlicensed sales at scale.
• Public consumer warnings on noncompliant websites or businesses, potentially impacting reputation and SEO.

The DCC and CDPH will gain expanded authority to audit, review logs, and issue violations thanks to the paper trail requirements.

Compliance Timelines: What to Watch in Late 2025

As of mid-2025, SB 378 has cleared several Assembly committees with recommendations for passage. Key events ahead:

• Final floor votes in the Assembly and Senate: Expected by late 2025.
• If signed, new compliance rules could take effect as early as Q2 2026.
• Expect DCC rulemaking workshops and public comment periods this fall and winter.
• Forward-looking businesses are already upgrading compliance systems to prepare for these possible mandates.

For the latest legislative status, the official California Legislative Information tracking page for SB 378 is recommended.

Takeaways for California Cannabis & Hemp Businesses (2025)

1. Prepare now: Whether you’re a platform, retailer, or hemp/CBD operator, assess your current online compliance workflows.
2. Build or purchase automated verification tools that integrate with California’s DCC license lookup and CDPH/USDA hemp lists.
3. Establish efficient takedown/reporting mechanisms: Assign staff or automate review workflows for flagged listings.
4. Educate your team: Ensure all teams understand new disclosure and recordkeeping obligations.
5. Monitor DCC and legislative updates as final compliance dates and enforcement rules are published in late 2025 and early 2026.

As California sets a new bar for digital cannabis and hemp oversight, proactive compliance now is vital to avoid enforcement headaches later. For continuous legislative tracking, compliance checklists, and integration options, visit CannabisRegulations.ai—the authoritative resource for cannabis business owners, compliance teams, and investors navigating California’s evolving regulatory environment.

Disclaimer: This blog is informational only and does not constitute legal advice. Please consult appropriate professionals or the Department of Cannabis Control for guidance on compliance with California cannabis laws and SB 378.