There's something I don't understand though. Does the California law actually contradict federal law? If so, which laws should you actually follow?

If the California state law says something is legal when federal law says it isn't, and it's the federal law that takes precedent, i'd call it irresponsible by the state legislature to issue such laws.

How can the Department of Justice threaten the land lord with foreclosure? Is there some kind of connection between the D.o.J. and Banks?

under the bush administration the DEA and other related federal institutions (DOJ)were given the authority to over-ride state laws.
i believe it was in 2004.
they have been selective in their prosecution of said authority,mainly in california.
the question of state rights/laws trumping federal law has been a contentious subject since the beginning of america.
i would refer to the federalist papers,article 51,in which alexander hamilton and james madison make such an argument on state vs federal powers.
i swear,its almost like we are living in bizzaro world,where republican and democrat have flipped ideologies on these matters.
how can something you do in the privacy of your own home,harm noone,can be considered against the law?
thanks to henry anslinger and his propaganda machine in the late 30's and early 40's demonizing weed,the american citizen has had to endure this egregious breach in our right to privacy.
its an inane,ill-thought and redundant law,based on bad science and even worse social engineering.
and we call ourselves free..pfffft.

This is what's being done with our American taxdollars in a recession. Wonderful.