Plain-English definitions for cannabis business owners, brand managers, and compliance teams. Every definition is researched from the source regulations and updated as rules change.
Internal Revenue Code §280E, a US federal tax provision that prohibits businesses "trafficking" in Schedule I or II controlled substances from deducting ordinary business expenses. Because cannabis remains federally Schedule I, state-legal dispensaries, cultivators, and manufacturers pay an effective tax rate of 60–85% on profits. Rescheduling cannabis to Schedule III would end 280E exposure.
Related: Schedule I · Rescheduling
State and federal rules governing where and how cannabis brands can advertise. Nearly all US states prohibit cannabis ads within X feet of schools, parks, and playgrounds. Many restrict billboards, broadcast, and digital advertising. Canada prohibits all cannabis advertising outside adult-only channels under the Cannabis Act.
Related: Promotional Product Restrictions
A container that requires at least two independent actions to open — such as a push-and-turn cap or a zipper-plus-puncture tab. Every US state that sells adult-use or medical cannabis requires CRP for flower, edibles, concentrates, and pre-rolls. Canada requires CRP federally under the Cannabis Act for all regulated products.
Related: Exit Bag · Plain Packaging · Tamper-Evident Packaging
Canada's federal cannabis law, S.C. 2018, c. 16, which legalized adult-use cannabis on October 17, 2018. The Act and its Cannabis Regulations (SOR/2018-144) set packaging, labeling, advertising, and THC-limit rules nationally. Provinces control retail and distribution.
Related: Licensed Producer (LP) · Plain Packaging · THC Symbol
A lab report confirming a cannabis product passed state-mandated testing for potency (THC/CBD), pesticides, heavy metals, microbials, mycotoxins, and residual solvents. All legal US and Canadian cannabis products must have a COA on file; many states require COA data to be posted publicly or on the product label.
Related: ISO/IEC 17025 · Testing Lab
Cannabidiol, the primary non-intoxicating cannabinoid in cannabis and hemp. Hemp-derived CBD (with ≤0.3% THC) is federally legal in the US but state restrictions vary. In Canada, all CBD is regulated as cannabis under the Cannabis Act and is sold only through licensed retailers.
Related: Hemp · Cannabis Act
A cylindrical, child-resistant tube used to package a single pre-roll for retail sale. Typically 90mm–120mm long, with a push-and-turn cap that meets CRP standards. Custom-branded doob tubes are a common promotional product for cannabis brands and dispensaries.
Related: Pre-Roll · Child-Resistant Packaging (CRP)
An opaque, child-resistant bag that cannabis products must be placed in at the point of sale before leaving the dispensary. Many states (including CA, CO, WA, MA, NV) require exit bags to be resealable and odor-proof. Often called a "compliance bag" or "retail bag."
Related: Child-Resistant Packaging (CRP) · Odor-Proof Packaging
State-imposed limits on the amount of THC per serving and per package of cannabis edibles. Most US states cap a single serving at 10mg THC and a single package at 100mg total. Canada caps all edibles federally at 10mg THC per package.
Related: Label Requirements
State- or provincially-mandated text warning consumers about the health risks of cannabis use. Canada requires one of 14 rotating standardized warnings in yellow. US state warnings vary — typically mentioning pregnancy, impairment, and legal age of sale — and must appear in a minimum font size (usually 6-8pt).
Related: Label Requirements · THC Symbol
Cannabis sativa containing 0.3% THC or less by dry weight. Federally legal in the US under the 2018 Farm Bill; cultivated under USDA or state hemp programs. Hemp-derived CBD is federally legal but regulated at the state level for food, beverage, and cosmetic uses.
Related: CBD
The international accreditation standard for testing and calibration laboratories. All cannabis testing labs that issue COAs in Canada and most US states must be ISO/IEC 17025-accredited, ensuring methodological rigor, proper calibration, and verifiable results.
Related: Certificate of Analysis (COA)
A Health Canada-licensed cannabis cultivator, processor, or seller under the Cannabis Regulations (SOR/2018-144). LPs are the only entities permitted to grow, process, or sell cannabis for the Canadian adult-use and medical markets. The closest US analog is a state-licensed cultivator or manufacturer.
Related: Micro-Cultivator · Cannabis Act
A state-imposed numeric limit on the total number of cannabis licenses (cultivator, dispensary, processor) that can be issued. Common in populous East Coast states (NY, NJ, MA, IL). License caps create limited, valuable licenses and drive secondary-market pricing well above application fees.
Related: Social Equity License
Mandatory elements that must appear on a cannabis retail package. Typically: license number, product weight, THC/CBD content per serving and per package, batch/lot code, test date, expiration date, ingredients, allergens, health warnings, government symbol (THC/CBD), and universal symbol. Specific fields, font sizes (usually 6–8pt minimum), and language vary by state.
Related: THC Symbol · Health Warning
A Health Canada license class for small-scale Canadian cannabis growers with a maximum canopy of 200 square metres. Designed to support craft cannabis production and lower barriers to entry. US states have parallel "craft" or "cottage" license classes with state-specific canopy limits.
Related: Licensed Producer (LP) · Cannabis Act
A US cannabis company that holds licenses in multiple state markets. Major public MSOs include Curaleaf, Green Thumb Industries, Trulieve, Cresco Labs, and Verano. Because cannabis remains federally illegal, each state license is technically a separate business; MSOs hold them through subsidiary entities.
Related: 280E · Vertical Integration
A flexible, multi-layer laminated pouch (typically BOPP/PET/foil) used to package cannabis flower, edibles, and pre-rolls. Mylar offers odor barrier, UV protection, and customizable printing. Most state-compliant mylar bags include a child-resistant zipper slider or heat-seal.
Related: Child-Resistant Packaging (CRP) · Odor-Proof Packaging · Exit Bag
Multi-layer packaging (usually with a foil or metallized layer) designed to contain cannabis odor. Some jurisdictions — including Canada federally and several US states — require exit bags or retail packaging to be odor-proof.
Canadian federal rule requiring cannabis products to use a single uniform color, no fluorescent or metallic colors, no cartoon or youth-appealing imagery, a standardized yellow warning label, and the red hexagonal THC symbol. US states have no equivalent plain-packaging rule but impose partial restrictions.
Related: THC Symbol · Health Warning
A ready-to-smoke cannabis joint rolled by a licensed processor and sold in a tube or pre-roll pack. Most states require pre-rolls to be in child-resistant, tamper-evident packaging with full label disclosures. Canada limits pre-rolls to 30g per package and applies the same plain-packaging rules as dried flower.
Related: Doob Tube · Label Requirements
State and provincial rules limiting cannabis-branded merchandise. Common restrictions: no giveaways of branded items to consumers, no branded items appealing to youth, no medical-benefit claims, no lifestyle imagery. Canada prohibits all promotional cannabis merchandise given free of charge. Several US states (NY, MA, CT) restrict branded swag.
Related: Advertising Restrictions
The maximum quantity of cannabis an adult may legally possess in public. US adult-use states typically permit 1–2.5 ounces of flower, 8g of concentrate, and varying edible allowances. Canada federally allows 30g of dried cannabis (or equivalent) in public.
Related: Purchase Limit
The maximum quantity of cannabis an adult can buy in a single transaction. Canada federally caps this at 30g of dried cannabis equivalent. US states vary — most adult-use states permit 1 ounce of flower per transaction; medical patients often have higher limits tied to physician recommendation.
Related: Possession Limit
The DEA's proposed move of cannabis from Schedule I to Schedule III of the Controlled Substances Act. Schedule III would end 280E tax exposure, enable traditional banking relationships, and permit broader medical research, but would NOT federally legalize state adult-use programs.
Related: Schedule I · 280E · SAFE Banking Act
A cannabis license granted with priority or fee reductions to applicants from communities disproportionately harmed by the War on Drugs. Criteria commonly include prior cannabis-related convictions, residency in "impact zones," income thresholds, or minority ownership. States with active social equity programs include Illinois, New York, New Jersey, Massachusetts, and California.
Related: License Cap
State-mandated software that tracks every gram of cannabis from a clone or seed through cultivation, testing, packaging, distribution, and final sale. The dominant platforms are Metrc (30+ states), BioTrack, and Flowhub. Canada uses Cannabis Tracking System (CTS) at the federal Health Canada level.
Related: Licensed Producer (LP)
The US federal Controlled Substances Act category for drugs considered to have "no accepted medical use" and high abuse potential. Cannabis has been Schedule I since 1970. The DEA proposed rescheduling to Schedule III in 2024; as of 2026 the proposal remains pending final rulemaking.
Related: Rescheduling · 280E
Proposed US federal legislation (the Secure and Fair Enforcement Banking Act) that would protect banks and financial services companies serving state-legal cannabis businesses from federal penalties. Has passed the House multiple times but never the Senate as of 2026. Would unlock traditional banking, payment processing, and insurance for cannabis operators.
Related: Rescheduling · 280E
A mandatory symbol indicating a product contains THC. Canada uses a red hexagonal symbol with a white cannabis leaf and the letters "THC" (1.27cm minimum). US states use a variety of state-specific symbols — for example, California's black-and-white triangular "!", Colorado's red diamond with "THC", and Washington's "Not Safe for Kids" octagon.
Related: Plain Packaging · Health Warning · Label Requirements
Packaging that shows a visible sign of opening — a peel-off seal, a breakable ring, or a shrink band. Most US states require both child-resistant AND tamper-evident features on cannabis retail packaging, not one or the other.
Related: Child-Resistant Packaging (CRP) · Exit Bag
A state-licensed, ISO/IEC 17025-accredited laboratory that analyzes cannabis products for regulatory compliance. Tests include potency, pesticides, heavy metals, residual solvents, microbials, mycotoxins, and moisture content. Every legal cannabis product must pass lab testing and have a COA before retail sale.
Related: Certificate of Analysis (COA) · ISO/IEC 17025
A business model where one company owns cultivation, processing, distribution, and retail within the same state cannabis market. Some states (like Florida) require vertical integration; others (like California and Illinois) prohibit it or permit cross-license ownership only through separate entities.
Related: MSO (Multi-State Operator)