This refers to a regulation in California that requires companies to provide warnings to consumers about products that contain chemicals known to the State of California to cause cancer, birth defects or other reproductive harm. Under the regulation, these warnings must be "clear and reasonable", and must be displayed prominently on the product or on its packaging.
In order to be compliant with Prop 65, companies must ensure that their products do not contain any of the over 900 chemicals listed under the regulation. If a product does contain one of these chemicals, the company must provide a warning to consumers.
There are a few exceptions to the requirements of Prop 65. One is if the level of exposure to the chemical is below a certain threshold. Another is if the chemical is an intentional ingredient in a product (such as Vitamin A in a supplement).
Prop 65 has been in effect since 1986, and has been amended several times since then. It is enforced by the California Attorney General's office.