It can be both. Selling cannabis, possessing it for sale, or transporting it for sale without a license can be charged as a crime under Health and Safety Code sections 11359 and 11360, and unlicensed commercial cannabis activity also carries civil penalties under Business and Professions Code section 26038. The civil penalty does not replace the criminal case: section 26038 says “criminal penalties shall continue to apply” to an unlicensed person engaged in commercial cannabis activity.

The criminal charges: Health and Safety Code 11359 and 11360

Section 11359 punishes possessing cannabis for sale “except as otherwise provided by law.” Section 11360 punishes transporting, importing into California, selling, furnishing, administering, or giving away cannabis, offering to do any of those, or attempting to import or transport it, unless the section itself or other law authorizes it. In section 11360, “transport” means transporting for sale.

For someone 18 or older, the starting penalty under either section is up to six months in county jail, a fine of up to $500, or both. A crime punishable only that way is a misdemeanor under Penal Code section 17(a). Someone under 18 is instead subject to the drug education or counseling and community service requirements of section 11357(b)(1).

Felony punishment becomes possible (each section says the adult “may be punished” that way) only when one of these facts applies:

  • An earlier conviction for one of the grave offenses named in Penal Code section 667(e)(2)(C)(iv), such as a homicide offense or a sexually violent offense, or for an offense that requires sex offender registration.
  • Two or more prior convictions under the same section’s adult misdemeanor provision.
  • A knowing sale or attempted sale of cannabis to someone under 18. Section 11360 also covers a knowing offer to sell, furnish, administer, or give away cannabis to someone under 18.
  • Section 11359 only: a person 21 or older knowingly hiring, employing, or using someone 20 or younger to cultivate, transport, carry, sell, offer to sell, give away, prepare for sale, or peddle cannabis.
  • Section 11360 only: importing, or offering or attempting to import, into California, or transporting for sale, or offering or attempting to, out of California, more than 28.5 grams of cannabis or more than 4 grams of concentrated cannabis.

The felony term under section 11360 is two, three, or four years. Section 11359 sets no term, so Penal Code section 1170(h) supplies 16 months, two, or three years. Both are county jail terms, except that section 1170(h)(3) moves the sentence to state prison for someone who, for example, has a prior or current serious or violent felony or must register as a sex offender.

Section 11360(b) adds a lower tier: giving away, or transporting for sale, 28.5 grams or less of cannabis (other than concentrated cannabis) is an infraction with a fine of up to $100, unless the law authorizes it.

The separate civil track: Business and Professions Code 26038

Section 26038 sets civil penalties at three levels:

  • Operating without a license (26038(a)(1)). Up to three times the license fee for each violation, and each day of operation is a separate violation.
  • Aiding and abetting (26038(a)(2)). The same formula, capped at $30,000 per violation, with each day of operation the person aided and abetted counted separately. The government must prove four things: the person was an owner, officer, controlling shareholder, or someone with similar authority to make command or control decisions about the operation or the property; the person actually knew the activity was unlicensed and needed a license; the person gave substantial assistance or encouragement; and that conduct was a substantial factor in furthering the activity.
  • Making commercial space available (26038(a)(3)). An owner, lessee, agent, employee, or mortgagee who manages or controls commercial property and knowingly rents, leases, or makes it available, paid or not, for unlicensed commercial cultivation, manufacture, storage, sale, or distribution faces up to $10,000 per violation, with each day a separate violation. Knowledge means actual knowledge that the activity was commercial, required a license, and was unlicensed. The presence of a lawful amount of cannabis, cannabis products, or plants “shall not be evidence of actual knowledge.”

In setting the amount, the court considers factors that include the gravity of the violation, the person’s good faith, any history of violations, and whether and how much the person profited. These actions may be brought by the Attorney General or by a city or county counsel or city prosecutor, but a local aiding-and-abetting action is limited to a city or county with more than 750,000 people. Under 26038(b), an action “shall not be commenced unless the action is filed within three years from the date of the violation.”

What this means in practice

  • A civil penalty action does not end criminal exposure. Section 26038 keeps criminal penalties in place and says it does not limit other state or local laws that apply to the same conduct.
  • If you own or manage the property, the statute requires proof of your actual knowledge, so evidence of what you knew, and when, is central. Keep the lease, inspection records, and a timeline of what you learned about the tenant’s activity. A lawful personal amount of cannabis on the premises is not evidence that you knew about a commercial operation.
  • Dates matter: each day of activity can be a separate civil violation, and the three-year limit is counted from the date of the violation.
  • Do not create, alter, or destroy business or lease records. Give your lawyer the real documents you already have.

For cultivation charges, see cultivation of marijuana; for cannabis charges generally, see marijuana charges.

If you face a criminal charge alongside a civil penalty action, call the Law Offices of David S. Chesley at (800) 755-5174 to discuss the criminal case and ask what separate counsel, if any, should handle the civil response and its deadline.