look for Owens Corning Foamular sheets. Its an XPS foam. The California issues are with the fire retardant HBCD.
I see on Google that Calif Home Depots carry it, so it must meet their codes.
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Interesting design and build. At a glance, the only thing that stands out as an "ehh", is the skinning. You'd be better off with polyester fabric. About $2.50/ft from George Dyson. gdyson@gmail.com. Email him and he'll give you links to his material list and images. 8oz should be fine. In fact, should be easier to glue to the foam than anything else.
For waterproofing, Dave Gentry has had good luck with PL glue.
Heres a demo:https://www.youtube.com/watch?v=o2FXKmFrmxw
Still needs s paint coat for UV protecction.

Last thing to add, plan to experiment and learn. All of this is new stuff to you, so test build & test coat a small section first and learn how to work with the materials and what works and what doesnt. Also, at that price point you could build an SOF kayak thats much better, if you like the designs and have the skills, http://www.yostwerks.org/
Jeff Horton of Kudzu has plans and excellent tutorials that are another choice. http://www.kudzucraft.com