LOS ANGELES (CBSLA/AP) — Nestle, which sells Arrowhead bottled water, may have to stop taking millions of gallons of water from the San Bernardino National Forest because state regulators concluded it lacks valid permits.

The State Water Resources Control Board notified the company on Wednesday that an investigation concluded it doesn’t have proper rights to about three-quarters of the water it withdraws for bottling its Arrowhead Mountain Spring Water.

“A significant portion of the water currently diverted by Nestle appears to be diverted without a valid basis of right,” the report concluded.

An intricate maze of pipes collects and funnels the water. The spring water collects in a tunnel and moves downhill through a pipeline. At the bottom, tanker trucks load and transport it to a nearby plant, where the water is bottled. The company argues that it does not pump or siphon the water, it just naturally flows.

Nestle has faced protests over its water collection in California because of the recent drought and the fact that the site is on public land. While the company takes about 30 million gallons each year, it pays only $524 to the U.S. Forest Service for the permit.

Of the company’s 40 water sources around the country, 11 are in California. Nestle Waters, a division of the Swiss food giant, is currently in the process of moving its U.S. headquarters from Glendale, Calif., to Rosslyn, Va.

Nestle was urged to cut back its water withdrawals unless it can show it has valid water rights to its current sources or to additional groundwater. The company was also given 60 days to submit an interim compliance plan.

Nestle said it was pleased that the report reaffirms that it holds valid rights to “a significant amount” of water.

“We will continue to operate lawfully according to these existing rights and will comply fully with California law,” Nestle added in a statement.

The report also was applauded by activists who have fought to turn off Nestle’s tap in the forest.

Amanda Frye, who filed one of the complaints that prompted the investigation, said she was pleased with the result although she hadn’t read the entire report.

“I feel like it’s a victory,” Frye told the Desert Sun of Palm Springs. “I’m happy that the State Water Resources Control Board did pursue it and look into it. I feel that they’re protecting the people of California.”

Nestle took about 32 million gallons of water from wells and water collection tunnels in the forest last year. A long water board investigation concluded that it only had the right to withdraw 26 acre-feet per year, or about 8.5 million gallons.

Nestle has contended that it inherited rights dating back more than a century to collect water from the forest northeast of Los Angeles. It uses the water in its Arrowhead Mountain Spring Water.

Opponents of the water withdrawal have long sought to turn off Nestle’s tap, arguing that it lacked proper permits and that the water usage could harm the environment and wildlife, particularly in the midst of California’s drought.

In 2015, the U.S. Forest Service was sued by environmental and public interest groups who allege the company was being allowed to operate its Strawberry Canyon pipeline on a permit that expired in 1988.

However, the court ruled that the company could continue water operations while its application to renew the permit was pending.

(© Copyright 2017 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)