AMENDED IN ASSEMBLY AUGUST 17, 2026
AMENDED IN ASSEMBLY JULY 2, 2026
AMENDED IN SENATE MAY 18, 2026
AMENDED IN SENATE APRIL 28, 2026
AMENDED IN SENATE APRIL 8, 2026
CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION
94
Introduced by Senators Blakespear and Umberg
(Coauthor: Senator Weber Pierson)
January 29, 2026
An act to amend Sections 22973.1, 22977.2, 22980.3, and 22980.5 of, and to add Sections 22980.7 and 22980.8 to, the Business and Professions Code, and to add Chapter 10 (commencing with Section 119408) to Part 15 of Division 104 of the Health and Safety Code, relating to nitrous oxide.
Vote: majority Appropriation: no Fiscal committee: yes Local program: yes
LEGISLATIVE COUNSEL’S DIGEST
Existing law makes it a misdemeanor to possess nitrous oxide with the intent of inhaling it for specified purposes, including to cause intoxication. Existing law also makes it a misdemeanor to sell nitrous oxide to any person under 18 years of age. Existing law makes it a misdemeanor to dispense nitrous oxide to a person and knowing that the person will use it for specified prohibited purposes, if that person then causes death or great bodily injury to themselves or another person.
Under existing
law, the Cigarette and Tobacco Products Licensing Act of 2003, the California Department of Tax and Fee Administration (CDTFA) administers and enforces a statewide program to license manufacturers, importers, distributors, wholesalers, and retailers of cigarettes and tobacco products. Existing law specifically requires a retailer, distributor, or wholesaler, as defined, to hold a license from the California Department of Tax and Fee Administration CDTFA to engage in the sale of cigarettes or tobacco products.
Existing law subjects these licenses to suspension or revocation for violations of existing law. Existing law imposes specified noticing and posting requirements for retailer licenses that are revoked. A violation of these provisions is a misdemeanor.
This bill would, except as specifically exempted, prohibit the sale and distribution of a nitrous oxide container that is capable of holding more than 8 grams of nitrous oxide or from which an individual may directly inhale nitrous oxide. The bill would also prohibit the sale and distribution of a nitrous oxide that has, or is marketed as having, the taste or smell of any food. The bill would prohibit knowingly selling or distributing a device that allows an individual to inhale nitrous oxide from the container or hold nitrous oxide for the purposes of inhalation. The bill would punish a violation of these provisions as an infraction, as specified. The bill would also authorize a
court to suspend the business license, including a license to sell tobacco products, a business license if the business has a prior conviction for violating these prohibitions. prohibitions, and to revoke a license to sell tobacco products if the business has 2 prior convictions for violating these prohibitions. The bill would make any person, distributor, or business found to have violated these prohibitions liable for all reasonable costs incurred by a public agency in the investigation, inspection, seizure, storage, transportation, handling, venting, abatement, disposal,
or destruction of nitrous oxide products, nitrous oxide containers, inhalation devices, or related materials involved in the violation, as specified.
This bill would prohibit a person that is engaged in the business of selling cigarettes or tobacco products in this state from possessing, storing, owning or selling nitrous oxide, in violation of the criminal provisions outlined above, at any site where cigarettes and tobacco products are stored or sold. The bill would authorize the CDTFA to seize nitrous oxide products, as prescribed. The bill would subject a violator to civil penalties in amounts depending on the aggregate retail value of the seized nitrous oxide and the number of violations within 5 years of the first violation. The bill would require the deposit of collected civil penalties in the Cigarette and Tobacco Products Compliance Fund. The bill would also subject a violator who commits a 2nd violation to license suspension and who commits a 3rd violation to license revocation, as prescribed.
This bill would establish procedures for the CDTFA to follow for a court-ordered revocation. The bill would require the CDTFA to assess a $250 civil penalty for each revoked license and to deposit collected civil penalties into the fund, to be made available to the department, upon appropriation by the Legislature, for purposes of administering the bill. The bill would authorize a licensee to apply for a new license at the previously revoked location 6 months after the date of revocation and would authorize the CDTFA, at its discretion, to issue a new license. The bill would apply these noticing and posting requirements to a retailer subject to a court-ordered revocation pursuant to the bill.
The California Constitution provides for the establishment of the State Board of Equalization, which, before July 1, 2017, had primary responsibility for most of the state’s duties, powers, and responsibilities regarding the administration of taxes and fees. Existing law, on July 1, 2017, transferred to the CDTFA various duties, powers, and responsibilities of the State Board of Equalization, including administration of the Cigarette and Tobacco Products Licensing Act of 2003, as specified.
This bill would change references in the provisions of the Cigarette and Tobacco Products Licensing Act of 2003 amended by this bill from the “State Board of Equalization” to the “California Department of Tax and Fee Administration” to reflect the transfer of the board’s duties, powers, and responsibilities to the CDTFA.
Because this bill would create new crimes, it would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
The people of the State of California do enact as follows:
SECTION 1.
Section 22973.1 of the Business and Professions Code is amended to read:
22973.1.
(a) The board department shall issue a license to a retailer upon receipt of a completed application and payment of the fees prescribed in Section 22973, unless any of the following apply:
(1) The retailer, or if the retailer is not an individual, any person controlling the retailer, has previously been issued a license that is suspended either of the following:
(A) Suspended or revoked by the board department for violation of any of the provisions of this division.
(B) Revoked by the department pursuant to a court order issued under subdivision (f) of Section 119408 of the Health and Safety Code.
(2) The application is for a license or renewal of a license for a retail location that is the same retail location as that of a retailer whose license was revoked or is subject to revocation proceedings for violation of any of the provisions of this division, unless:
(A) It has been more than five years since a previous license for the retail location was revoked.
(B) The person applying for the license provides the board department with documentation demonstrating that the applicant has acquired or is acquiring the premises or business in an arm’s length transaction. For purposes of this section, an “arm’s length transaction” is defined as a sale in good faith and for valuable consideration that reflects the fair market value in the open market between two informed and willing parties, neither under any compulsion to participate in the transaction. A sale between
relatives, related companies or partners, or a sale for the primary purpose of avoiding the effect of the violations of this division that occurred at the retail location, is presumed not to be made at “arm’s length.”
(3) The retailer, or if the retailer is not an individual, any person controlling the retailer, has been convicted of a felony pursuant to Section 30473 or 30480 of the Revenue and Taxation Code.
(4) The retailer does not possess all required permits or licenses required under the Revenue and Taxation Code.
(b) (1) Any retailer who is denied a license may petition for a redetermination of the board’s department’s
denial of the license within 30 days after service upon that retailer of the notice of the denial of the license. If a petition for redetermination is not filed within the 30-day period, the determination of denial becomes final at the expiration of the 30-day period.
(2) Every petition for redetermination shall be in writing and shall state the specific grounds upon which the petition is founded. The petition may be amended to state additional grounds at anytime prior to any time before the date on which the board department issues its order or
decision upon the petition for redetermination.
(3) If the petition for redetermination is filed within the 30-day period, the board department shall reconsider the determination of the denial and, if the retailer has so requested it in the petition, shall grant the retailer an oral hearing and shall give the retailer at least 10 days’ notice of the time and place of the hearing. The board department
may continue the hearing from time to time as may be necessary.
(4) The order or decision of the board department upon a petition for redetermination becomes final 30 days after mailing of notice thereof.
SEC. 2.
Section 22977.2 of the Business and Professions Code is amended to read:
22977.2.
(a) The board department shall issue a license to a distributor or a wholesaler upon receipt of a completed application and payment of the fee prescribed in Section 22977.1, unless any of the following apply:
(1) The distributor or the wholesaler, or if the distributor or the wholesaler is not an individual, any person controlling the distributor or the wholesaler, has previously been issued a license that is suspended
one of the following:
(A) Suspended or revoked by the board department for violation of any of the provisions of this division.
(B) Revoked by the department pursuant to a court order issued under subdivision (f) of Section 119408 of the Health and Safety Code.
(2) The application is for a license or renewal of a license for a distributor or a wholesaler, whose license is revoked or revocation is pending, unless:
(A) It has been more than five years since a distributor’s or a wholesaler’s previous license was revoked.
(B) The person applying for the license provides the board department with documentation demonstrating that the applicant has acquired or is acquiring the business in an arm’s length transaction. For purposes of this section, an “arm’s length transaction” is defined as a sale in good faith and for valuable consideration that reflects the fair market value in the open market between two informed and willing parties, neither under any compulsion to participate in the
transaction. A sale of the business between relatives, related companies or partners, or a sale for the primary purpose of avoiding the effect of the violations of state tobacco control laws that were committed by the distributor or wholesaler is presumed not to be made at “arm’s length.”
(3) The distributor or the wholesaler, or if the distributor or the wholesaler is not an individual, any person controlling the distributor or the wholesaler has been convicted of a felony pursuant to Section 30473 or 30480 of the Revenue and Taxation Code.
(b) (1) Any distributor or any wholesaler who is denied a license may petition for a redetermination of the board’s department’s
denial of the license within 30 days after service upon that distributor or that wholesaler of the notice of the denial of the license. If a petition for redetermination is not filed within the 30-day period, the determination of denial becomes final at the expiration of the 30-day period.
(2) Every petition for redetermination shall be in writing and shall state the specific grounds upon which the petition is founded. The petition may be amended to state additional grounds at anytime prior to any time before the date on which the board department
issues its order or decision upon the petition for redetermination.
(3) If the petition for redetermination is filed within the 30-day period, the board department shall reconsider the determination of the denial and, if the distributor or the wholesaler has so requested
it in the petition, shall grant the distributor or wholesaler an oral hearing and shall give the distributor or the wholesaler at least 10 days’ notice of the time and place of the hearing. The board department may continue the hearing from time to time as may be necessary.
(4) The order or decision of the board department upon a petition for redetermination becomes final 30 days after mailing of notice thereof.
SEC. 3.
Section 22980.3 of the Business and Professions Code is amended to read:
22980.3.
(a) Licenses Except as provided in subdivision (l), a license issued pursuant to this division shall be subject to suspension or revocation for violations of this division or the Revenue and Taxation Code as provided in this section.
(1) In addition to any applicable fines or penalties for a violation, upon first conviction of a violation, a licensee shall receive a written notice from the board department
detailing the suspension and revocation provisions of this division. At its discretion, the board department may also suspend a license for up to 30 days.
(2) In addition to any applicable fines or penalties for a violation, upon a second conviction of a violation within four years of a previous violation, the license shall be revoked.
(b) The date of the occurrence of a violation shall be used to calculate the duration between subsequent violations. A violation shall be noted in the license record at the board
department
only after judicial conviction or final adjudication of a violation.
(c) Upon updating a record for a violation triggering a suspension, the board department shall serve the licensee with a notice of suspension and shall order the licensee to cease the sale, gifting, or displaying for sale of cigarettes or tobacco products for the period of the suspension. The notice of suspension shall inform the licensee of the effective dates of the suspension.
(d) Continued sales or gifting of cigarettes or tobacco products after the effective date of the suspension shall constitute a violation of this division and result in the revocation of a license.
(e) Upon completion of a suspension period, a license shall be reinstated by the board
department upon certification that all outstanding debts of that retailer or wholesaler that are owed to a wholesaler or distributor for the purchase of cigarettes and tobacco products are paid.
(f) Upon updating a record for a violation triggering a revocation, the board department shall serve the licensee with a notice of revocation and shall order the licensee to cease the sale, gifting, or displaying for sale of cigarettes or tobacco products on and after the effective date of the revocation. The notice of revocation shall inform the licensee of the effective date of the revocation.
(g) After a revocation, a previously licensed applicant may
apply for a new license after six months. The board may, department, at its discretion, may issue a new license.
(h) Upon updating a license record for a violation, suspension, or revocation to a license of a person or entity that owns or controls more than one location, the board department shall send notice in writing of the violations, suspensions, or revocations within 15 days of the board’s
department’s action to the address included in the application and listed on the license for receipt of correspondence or notices from the board.
department.
(i) Upon suspension or revocation of a license pursuant to this section, the board department shall notify all licensed distributors and wholesalers by electronic mail email within 48 hours of the suspension or revocation of that license. All licensed distributors and wholesalers shall provide the board department and shall
update, as necessary, an electronic mail
email address that the board department can use for purposes of making the notifications required by this subdivision.
(j) Violations by a licensee at one location may not be accumulated against other locations of that same licensee. Violations accumulated against a prior owner at a licensed location may not be accumulated against a new owner at the same licensed location.
(k) For purposes of this section, a violation includes violations of the Revenue and Taxation Code relating to cigarettes and tobacco products, and violations of this division. Only one violation per discrete action shall be counted toward a suspension or revocation of a license.
(l) A license revoked by the department pursuant to a court order issued under subdivision (f) of Section 119408 of the Health and Safety Code is subject to the procedures provided in Section 22980.8.
SEC. 4.
Section 22980.5 of the Business and Professions Code is amended to read:
22980.5.
(a) A retailer whose license has been suspended or revoked by order of the board department shall conspicuously post a notice at both of the following locations:
(1) Each public entrance to the retail location. The notice shall directly face any person who enters the retail location and shall not be obstructed from view or placed at a height of less than four feet or greater than nine feet from the floor.
(2) Each cash register and other point of retail sale. The notice shall be posted so as
to be readily viewable by a person standing at or approaching the cash register or other point of retail sale. The notice shall directly face the purchaser and shall not be obstructed from view or placed at a height of less than four feet or greater than nine feet from the floor.
(b) The notices described in this section shall be in the size and form prescribed by the board. department. The notice shall be provided by the board department and may be reproduced in the same size and form in order
to comply with subdivision (a).
(c) A retailer whose license was suspended shall post the notice at the retail location that was the subject of the suspension for the duration of the suspension.
(d) A retailer whose license was revoked shall post the notice at the retail location that was the subject of the revocation for a 30-day period from the effective date of the revocation.
(e) Every retailer who fails to post the notices as required by this section, who alters the notice provided by the board, department, or who removes the notice before the posting period required in subdivision (c) or (d), as
appropriate, expires, shall be subject, notwithstanding Section 22981, to a civil penalty of one thousand dollars ($1,000) for each offense.
(f) A retailer whose license has been revoked by the department pursuant to a court order issued under subdivision (f) of Section 119408 of the Health and Safety Code is subject to this section.
SEC. 5.
Section 22980.7 is added to the Business and Professions Code, to read:
22980.7.
(a) (1) A person that is engaged in the business of selling cigarettes or tobacco products in this state shall not possess, store, own, or sell nitrous oxide, in violation of Section 119408 of the Health and Safety Code, at any site where cigarettes and tobacco products are stored or sold.
(2) A person who violates this subdivision is subject to civil penalties and suspension or revocation of their license pursuant to subdivision (c).
(b) Upon discovery by the department that any person possesses, stores, owns, or has made a sale of nitrous oxide in violation of this section, the department may seize those products at the person’s location. Any nitrous oxide seized by the department pursuant to this subdivision shall be deemed forfeited and the department shall comply with the procedures set forth in Sections 30436 to 30449, inclusive, of the Revenue and Taxation Code.
(c) (1) (A) A first violation of subdivision (a) involving the seizure of nitrous oxide shall be punishable as follows:
(i) If the aggregate retail value of the seized nitrous oxide is less than two hundred dollars ($200), a civil penalty of one thousand dollars ($1,000) shall be imposed.
(ii) If the aggregate retail value of the seized nitrous oxide is two hundred dollars ($200) or more, a civil penalty of two thousand dollars ($2,000) shall be imposed.
(B) A second violation of subdivision (a) within five years of the first violation involving a seizure of nitrous oxide shall be punishable as follows:
(i) If the aggregate retail value of the seized nitrous oxide is less than two hundred dollars ($200), a civil penalty of two thousand dollars ($2,000) shall be imposed, and shall also result in a five-day suspension of the license.
(ii) If the aggregate retail value of the seized nitrous oxide is two hundred dollars ($200) or more, a civil penalty of five thousand dollars ($5,000) shall be imposed, and shall also result in a 10-day suspension of the license.
(C) A third violation of subdivision (a) within five years of the first violation involving a seizure of nitrous oxide shall be punishable as follows:
(i) If the aggregate retail value of the seized nitrous oxide is less than two hundred dollars ($200), a civil penalty of five thousand dollars ($5,000) shall be imposed, and shall also result in revocation of the license.
(ii) If the aggregate retail value of the seized nitrous oxide is two hundred dollars ($200) or more, a civil penalty of ten thousand dollars ($10,000) shall be imposed, and shall also result in revocation of the license.
(2) The department shall determine to the best of its ability the retail value based on any information within the department’s possession or that may come into its possession of the nitrous oxide.
(3) The department shall issue the civil penalty in accordance with the procedures applicable to the civil penalty authorized under Section 22974.7.
(4) The department shall revoke or suspend the license of a person who violates subdivision (a) in accordance with the procedures set forth in Section 22980.3.
(d) Civil penalties collected pursuant to this section shall be deposited into the Cigarette and Tobacco Products Compliance Fund created pursuant to Section 22990.
SEC. 6.
Section 22980.8 is added to the Business and Professions Code, to read:
22980.8.
(a) Upon receiving notification by a court of its order issued pursuant to subdivision (f) of Section 119408 of the Health and Safety Code, the department shall revoke the license.
(b) When a license is revoked pursuant to this section, the department shall provide the licensee with no fewer than 10 days’ written notice of a pending revocation pursuant to this section and an opportunity to appeal the revocation only to correct a mistake or clerical error. The department shall not accept or consider an appeal of revocation under this section if the appeal is founded upon the grounds of whether the licensee, or any employee or agent of the licensee, violated Section 119408 of the Health and Safety Code for which a revocation order is issued by a court pursuant to subdivision (f) of that section. This subdivision shall not be construed to prevent the department from modifying its action on its own to correct a mistake or clerical error.
(c) For each license revoked pursuant to subdivision (a), the department shall assess a civil penalty of two hundred fifty dollars ($250) against the licensee subject to the revocation. Moneys derived from the civil penalty collected shall be deposited into the Cigarette and Tobacco Products Compliance Fund and shall be made available to the department, upon appropriation by the Legislature, for the purposes of administering this section.
(d) Upon updating a license record for a court-ordered revocation, the department shall serve the licensee with a notice of revocation and shall order the licensee to cease the sale, gifting, or displaying for sale of cigarettes or tobacco products at the indicated location on and after the effective date of the revocation. The notice of revocation shall inform the licensee of the effective date of the revocation.
(e) After a license has been revoked pursuant to subdivision (a), that licensee may apply for a new license at the previously revoked location six months after the date of revocation. The department, at its discretion, may issue a new license.
(f) Upon updating a license record for a revocation of a license of a person or entity that owns or controls more than one location, the department shall send notice in writing of the revocation within 15 days of the department’s action to the address included in the application and listed on the license for receipt of correspondence or notices from the department.
(g) Upon revocation of a license pursuant to this section, the department shall notify all licensed distributors and wholesalers by email within 48 hours of the revocation of that license. All licensed distributors and wholesalers shall provide the department with and shall update, as necessary, an email address that the department can use for purposes of making the notifications required by this subdivision.
SECTION 1.SEC. 7.
Chapter 10 (commencing with Section 119408) is added to Part 15 of Division 104 of the Health and Safety Code, to read:
Chapter 10. Nitrous Oxide
119408.
(a) Except as provided in this section, it is unlawful for any person to sell, offer to sell, or distribute a nitrous oxide container that is capable of holding more than eight grams of nitrous oxide.
(b) Except as provided in this section, it is unlawful for any person to sell, offer to sell, or distribute a nitrous oxide container from which an individual may directly inhale nitrous oxide.
(c) It is unlawful to sell, offer to sell, or distribute nitrous oxide that has, or is marketed as having, the taste or smell of any food, including, but not limited to, any fruit, candy, dessert, alcoholic beverage, herb, or spice, that is distinguishable by an ordinary consumer either prior to or during consumption or use of the product.
(d) It is unlawful to sell, offer to sell, or distribute a device that a person knows, or reasonably should know, allows an individual to inhale nitrous oxide from the nitrous oxide container or to hold nitrous oxide released from the nitrous oxide container for purposes of inhalation.
(e) A violation of this section is punishable as an infraction punishable by a fine of not more than five hundred dollars ($500) for the first offense, one thousand dollars ($1,000) for a second offense, or two thousand dollars ($2,000) for a third and subsequent offense.
(f) (1) In addition to the penalties described in subdivision (e), a court may issue either or both of the following orders:
(A) The suspension of a business license issued by the state, a city, a county, or a city and county, for a period of up to one year, of a business that knowingly violates this section following a prior conviction for a violation of this section.
(B) The suspension revocation of a license issued pursuant to the Cigarette and Tobacco Products Licensing Act of 2003 (Division 8.6 (commencing with Section 22970) of the Business and Professions Code) or a seller’s permit issued by the California Department of Tax and Fee Administration pursuant to Section 6067 of the Revenue and Taxation Code, for a period of up to one year,
of a business that knowingly violates this section following a prior conviction for a violation two prior convictions for violations of this section.
(2) (A) The court shall provide a copy of any suspension order to the appropriate regulating agency.
(B) If a revocation order is issued by a court for a license issued pursuant to the Cigarette and Tobacco Products Licensing Act of 2003, the court shall notify the California Department of Tax and Fee Administration and include in that notice information concerning the person that holds the license, the type of license to be revoked, and the location for which the court has ordered the revocation.
(3) For purposes of this subdivision, a “business license” does not include any license issued pursuant to the Cigarette and Tobacco Products Licensing Act of 2003 or a permit issued pursuant to Section 6067 of the Revenue and Taxation Code.
(g) This section Subdivision (a) does not apply to nitrous oxide or a nitrous oxide container that meets any of the following:
(1) Has been denatured or otherwise rendered unfit for human consumption or use.
(2) Is intended and marketed for use by a manufacturer as part of a manufacturing process or industrial operation.
(3) Is specifically designed and marketed for use in a vehicle to enhance the performance of the vehicle.
(4) Is sold to a licensed medical, veterinary, or dental practitioner to be administered or prescribed as part of the care or treatment of a disease, condition, or injury.
(5) Contains less than nine grams of nitrous oxide as a propellant in food or to be used in food preparation for restaurant, food service, or houseware products.
(6) Is sold by a wholesaler for any purpose listed in this subdivision.
(h) This section does not apply to commercially manufactured, sealed finished food products intended for retail sale as food that contain nitrous oxide solely as a propellant for dispensing the food product.
(i) For the purposes of this section, the following terms have the following meanings:
(1) “Distributor” means a person who sells a product to a retailer in violation of this section, or accepts an order for a product from a retailer in violation of this section.
(2) “Nitrous oxide container” means a device, canister, tank, or receptacle either exclusively containing nitrous oxide or exclusively containing a chemical compound mixed with nitrous oxide.
(3) “Nitrous oxide” has the same meaning as in Section 381c of the Penal Code.
(j) For purposes of this section, a reference to a sale, offer to sell, distribution, advertisement, or provision of a product or service includes conduct that occurs in person, through the internet, or through any other electronic or digital means.
(k) This section does not limit the authority of a city, county, or city and county to adopt or enforce a local ordinance that further restricts the sale, furnishing, offering, or distribution of nitrous oxide.
(l) (1) Any person, distributor, or business found to have violated this section shall be liable for all reasonable costs incurred by a public agency in the investigation, inspection, seizure, storage, transportation, handling, venting, abatement, disposal, or destruction of nitrous oxide products, nitrous oxide containers, inhalation devices, or related materials involved in the violation.
(2) In any action brought to enforce this section, the court may order recovery of reasonable enforcement costs incurred by the enforcing agency.
(3) Funds recovered pursuant to this section shall be payable to the enforcing agency and shall be used to offset costs associated with enforcement of this section.
SEC. 2.SEC. 8.
No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.