Gather fruits of Umbellularia californica from October to December. Remove the dark brown seed from the fruit. Wash the seeds. Prepare them for stratification, or cold treatment, immediately. Or, purchase fresh seeds from a reliable source.
Crack the seeds lightly before allowing them to germinate. Place the seeds between two pieces of paper towel and roll over the seeds with a rolling pin.
Mix together equal parts of peat moss and perlite. Add sufficient water to moisten but not soak the mixture. Put a handful or two of the mix into a sealable plastic bag and add the lightly cracked seeds, surrounding them with the mix. Label the bag with the plant name and the date using a fine-tip permanent marker.
Place the bag in a refrigerator crisper drawer at about 40 degrees Fahrenheit for three to four months. Take the bag out every few weeks to see if seeds have begun to sprout yet. Remove seeds as soon as they begin to germinate, usually right after three months.
Plant germinated seeds individually into 4-inch pots, using a soilless growing mix. Cover the seeds with a layer of potting mix twice the thickness of the seed. Keep the seedlings well-watered but not soggy. As the roots fill the pot, transplant the seedlings to a 1-gallon pot. Allow the upper 2 inches of soil to dry out between waterings as the plant grows larger.
Transfer the California bay laurel plant to its location in the landscape before it becomes a year old to give the roots a chance to grow into the soil while the plant is still young.