BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 2312 
                                                                  Page 1

          Date of Hearing:  April 10, 2012
          Consultant:     Jesse Stout


                         ASSEMBLY COMMITTEE ON PUBLIC SAFETY
                                 Tom Ammiano, Chair

                AB 2312 (Ammiano) - As Introduced:  February 24, 2012
           
           
           SUMMARY  :  Authorizes local taxes on medical cannabis up to 2.5%. 
           Creates a nine-member Board of Medical Marijuana Enforcement 
          (BMME) to regulate the medical cannabis industry and collect 
          fees from medical cannabis businesses to be deposited in a new 
          Medical Marijuana Fund.  Specifically,  this bill  : 

          1)Establishes the Medical Marijuana Regulation and Control Act.

          2)Declares legislative intent to accomplish all of the 
            following:

             a)   To establish a statewide system for regulating and 
               controlling medical marijuana activities by creating a 
               state board to enact and enforce regulations governing the 
               cultivation, processing, manufacturing, testing, 
               transportation, distribution, and sale of medical 
               marijuana.

             b)   To allow cities and counties to enact reasonable zoning 
               regulations or other restrictions applicable to the 
               cultivation, processing, manufacturing, testing, and 
               distribution of medical marijuana based on local needs.

             c)   To prohibit the issuance and use of fraudulent or forged 
               physician's recommendations for medical marijuana.

             d)   To establish the BMME to be located within the 
               Department of Consumer Affairs to provide a governmental 
               agency that will ensure the strict, honest, impartial, and 
               uniform administration and enforcement of the medical 
               marijuana laws throughout California.

             e)   To fulfill the promise of the Compassionate Use Act of 
               1996 to "implement a plan for the safe and affordable 
               distribution of marijuana to all patients in medical need 








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               of marijuana."

             f)   To support the creation of a more appropriate schedule 
               for marijuana that recognizes its medical use in the State 
               of California.

             g)   To reduce the cost of medical marijuana enforcement by 
               providing law enforcement guidelines to more easily 
               determine whether or not a person is acting in conformance 
               with the state's medical marijuana laws and by providing 
               courts and prosecutors flexibility in the punishment of 
               minor marijuana offenses.

          3)Provides that qualified patients, persons with valid 
            identification cards, and the designated primary caregivers of 
            qualified patients and persons with identification cards, may 
            associate within the State of California as collectives, 
            cooperatives, and other business entities to cultivate, 
            acquire, process, possess, transport, test, sell and 
            distribute marijuana for medical purposes and shall not be 
            subject to arrest, prosecution, or sanctions under provisions 
            of law related to unauthorized possession, cultivation, 
            possession for sale, transportation, sale, import, giving 
            away, manufacturing, opening or maintaining unlawful places, 
            renting or leasing real property for the unlawful manufacture 
            or sale of controlled substances, or nuisance and abatement on 
            the basis of that fact, unless those persons are not in 
            compliance with the registration requirements provided in this 
            bill.

          4)States that the provisions in this bill apply to all members 
            of an entity formed pursuant to these provisions regardless of 
            whether those members contribute to any of the activities of 
            the entity.

          5)Adds a person who knowingly produces, issues, utilizes, or 
            sells a falsified, forged, or fraudulent physician's 
            recommendation for medical marijuana to the list of persons 
            subject to misdemeanor penalties under the Compassionate Use 
            Act.

          6)Clarifies that nothing in this bill shall prevent a city or 
            other local governing body from adopting local ordinances that 
            regulate the location, operation, or establishment of a 
            medical marijuana cooperative or collective, consistent with 








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            the provisions of this bill.

          7)Establishes the Medical Marijuana Regulation and Control Act.

          8)Defines the following:

             a)   "Board" is the BMME.

             b)   "Executive director" is the Executive Director of the 
               BMME.

             c)   "Financial institution" is a bank, savings and loan 
               association, or credit union chartered under the laws of 
               California or the United States.

             d)   "Fund" is the Medical Marijuana Fund.

             e)   "Mandatory registrant" is a person required to register 
               with the BMME pursuant to the provisions of this article.

             f)   "Mandatory registration" is a registration issued by the 
               BMME pursuant to this article.

             g)   "Medical marijuana dispensary" is any facility, 
               building, structure, or location where medical marijuana is 
               sold to qualified patients, primary caregivers, or persons 
               with identification cards issued by the State Department of 
               Health Services identifying a person to engage in medical 
               use of marijuana. 

             h)   "Medical marijuana facility" is any facility, building, 
               structure, or location where medical marijuana is grown, 
               processed, stored, manufactured, tested, or sold, other 
               than a private residence where medical marijuana is grown 
               for personal use and not for sale.

             i)   "Person" includes any individual, partnership, joint 
               venture, association, limited liability company, 
               corporation, estate, trust, receiver, syndicate, or any 
               other group or combination thereof acting as a unit.

          9)States that this article shall not apply to, and shall have no 
            diminishing effect on, the rights and protections currently 
            granted to individual patients and primary caregivers pursuant 
            to the Compassionate Use Act.








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          10)Requires a medical marijuana facility to operate in 
            accordance with this article.  Individual patients and 
            caregivers cultivating marijuana at their private residences 
            in accordance with local zoning and building codes who do not 
            sell or charge for the cultivation of marijuana are not 
            considered medical marijuana facilities, and are exempt from 
            mandatory registration.

          11)Declares legislative intent that each city, county, and city 
            and county permit the development of sufficient numbers and 
            types of medical marijuana facilities as are commensurate with 
            local needs, consistent with the provisions of this article.

          12)States that the provisions of this article shall preempt all 
            local ordinances or regulations relating to the regulation and 
            control of medical marijuana and shall apply equally to a 
            charter city or county, and a city or county shall not 
            prohibit the operation of persons registered pursuant to this 
            article or restrict their location or operation to frustrate 
            the provisions of this article, to render the application or 
            enforcement of this article impractical or impossible, or to 
            restrict the location of medical marijuana dispensaries so as 
            to authorize fewer than one medical marijuana dispensary per 
            50,000 residents, except:

             a)   A city or county with a population of at least 50,000 
               may prohibit the establishment of medical marijuana 
               dispensaries within its jurisdiction, or limit the number 
               of allowed medical marijuana dispensaries to a number below 
               one per 50,000 residents, if an ordinance or regulation 
               authorizing that restriction has been approved by the 
               voters of the city, county, or city and county.  In no 
               event may a city, county, or city and county enact 
               legislation that impairs the rights granted to qualified 
               patients and their caregivers.

             b)   A city or county with a population of less than 50,000 
               residents may prohibit the establishment of a medical 
               marijuana dispensary within its jurisdiction provided that 
               the legislative body of a city or county make a written 
               finding to the board supported by evidence adduced during 
               at least one public hearing that medical marijuana is 
               reasonably available to its residents by other means.









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             c)   A legislative body of a city or county with existing 
               medical marijuana regulations may provide to the BMME a 
               list of regulated persons that it finds to be in good 
               standing under its local medical marijuana regulations in 
               force as of the effective date of the act adding this 
               article, which shall be accompanied by a certified copy of 
               any ordinance regulating the location or operation of 
               medical marijuana facilities in that jurisdiction.  These 
               persons shall automatically be deemed successful mandatory 
               registrants for purposes of this article, and shall be 
               exempt from renewal procedures for three years from the 
               effective date of the act adding this article.  Any person 
               found to not be in good standing shall not be deemed 
               successful mandatory registrants for purposes of this bill.

          13)States that if a city or county does not enact a medical 
            marijuana dispensary zoning ordinance, medical marijuana 
            dispensaries in that jurisdiction shall be wholly regulated by 
            the BMME pursuant to this article, and medical marijuana 
            dispensaries that are mandatory registrants may locate in that 
            jurisdiction in any location that the BMME finds to be 
            appropriately zoned, subject to the restrictions on proximity 
            to schools.

          14)Creates within the Department of Consumer Affairs a BMME, 
            administered by a governing body as prescribed, and a civil 
            executive officer appointed by the Director of Consumer 
            Affairs who shall be known as the "Executive Director of the 
            BMME".

          15)Provides that the funds for the establishment and support of 
            the BMME shall be advanced as a loan by the Department of 
            Consumer Affairs and shall be repaid by the initial proceeds 
            from fees collected from processing applications, 
            registrations, notices or reports required to be submitted to 
            the BMME.

          16)Requires the governing body of the BMME to consist of the 
            following nine members:  one licensed physician appointed by 
            the Governor, one full-time peace officer appointed by the 
            Governor, three California residents appointed by the 
            Governor, one California resident appointed by the Speaker of 
            the Assembly, one California resident appointed by the Senate 
            Committee on Rules, one medical marijuana patient advocate 
            appointed by the Speaker of the Assembly, and one qualified 








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            medical marijuana patient appointed by the Senate Rules 
            Committee. 

          17)States that in making these appointments, the Senate 
            Committee on Rules and the Speaker of the Assembly shall make 
            good-faith efforts to ensure that their appointments reflect 
            the economic, social, and geographic diversity of California.

          18)Provides that the authority responsible for appointing a 
            member of the governing body of the BMME shall appoint each 
            member within 90 days of the effective date of this bill.

          19)States that a majority of the total appointed membership of 
            the governing body of the BMME shall constitute a quorum.  Any 
            action taken by the governing body of the BMME requires a 
            majority vote of the members present at the meeting of the 
            governing body of the BMME, with a quorum being present, 
            unless otherwise specifically provided.

          20)Mandates the governing body of the BMME to elect a 
            chairperson and vice chairperson from among its members and 
            meet at least quarterly on call of the executive director, the 
            chairperson, or three members of the governing body of the 
            BMME.

          21)States that the terms of the members of the governing body of 
            the BMME shall be three calendar years.  No member shall serve 
            more than two consecutive full terms.  If a vacancy occurs 
            prior to the expiration of the term for the vacated seat, the 
            appointing authority of that vacant seat shall appoint a 
            replacement member for the remainder of the unexpired term on 
            or before 30 days after the occurrence of the vacancy.

          22)Requires the BMME to perform all of the following:

             a)   Approve or deny mandatory registration applications for 
               the cultivation, processing, manufacturing, testing, 
               transportation, distribution, and sale of medical marijuana 
               as provided by state law; 

             b)   Suspend, fine, restrict, or revoke registration based 
               upon a violation of these provisions, or a rule or 
               regulation promulgated pursuant to them;

             c)   Impose penalties authorized by this article or by any 








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               rule or regulation promulgated pursuant to this article;

             d)   Adopt, amend, and rescind reasonable regulations, 
               special rulings, and findings as necessary for the 
               regulation and control of the cultivation, processing, 
               manufacturing, testing, transportation, distribution, and 
               sale of medical marijuana, and to govern the procedures of 
               the BMME to exercise its powers and perform its duties;

             e)   Hold public hearings to hear and decide any appeals from 
               denials of a mandatory registration application, and any 
               complaints against a registered person;

             f)   Administer oaths and issue subpoenas to require the 
               presence of individuals and the production of papers, 
               books, and records necessary to the determination of any 
               hearing. Any such hearing shall be conducted in accordance 
               with Government Code Section 11500 et seq.;

             g)   Maintain the confidentiality of any information obtained 
               from a registered person related to medical-marijuana 
               patients or caregivers in compliance with the federal 
               Health Insurance Portability and Accountability Act 
               (HIPPA), the Confidentiality of Medical Information Act 
               (Civil Code Section 56 et seq.) , and the Insurance 
               Information and Privacy Protection Act (Insurance Code 
               Section 791 et seq.);

             h)   Develop any necessary forms, identification cards, and 
               applications for the administration of this article or any 
               of the rules or regulations promulgated pursuant it;

             i)   Develop zoning standards that shall be applicable if a 
               city or county does not enact a medical marijuana 
               dispensary zoning ordinance;

             j)   Oversee operation of the Medical Marijuana Fund; and

             aa)  Establish processing fees for all applications, 
               registrations, notices, or reports required to be submitted 
               to the BMME.  Such fees shall be deposited into the Medical 
               Marijuana Fund.  The amount of fees shall reflect the 
               BMME's direct and indirect costs to administer and enforce 
               the provisions of this article, and shall be assessed on a 
               sliding-fee scale to reflect the projected revenue of the 








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               particular registrant.

          23)Requires the regulations to be promulgated by the BMME to 
            include:  

             a)   Procedures and grounds for issuing, renewing, denying, 
               suspending, issuing fines in connection with, restricting, 
               or revoking a mandatory registration;

             b)   Civil penalties, including fines, for violating the 
               provisions of this article;

             c)   Prohibition of misrepresentation and unfair practices;

             d)   Best practices guiding advertisements promoting the 
               purchase of medical marijuana, and relating to its 
               labeling, packaging, and testing;

             e)   Security requirements for premises subject to mandatory 
               registration;

             f)   Regulations for the storage and transportation of 
               medical marijuana; 

             g)   Requirements for waste disposal and recycling; 

             h)   Guidelines regarding cultivation, including use of 
               pesticides and fungicides and the reduction of 
               environmental impacts;

             i)   Establishment of exemptions from registration or reduced 
               fees for non-commercial collectives, non-profit 
               registrants, and other qualified persons;

             j)   Protocols to prevent unlawful diversion of marijuana; 
               and

             aa)  Any other regulations in furtherance of this article.

          24)States that the BMME is not authorized to set prices for 
            medical marijuana.

          25)Creates the Medical Marijuana Fund within the State Treasury, 
            and specifies that all moneys collected under these provisions 
            shall be deposited into the fund, as well as any interest and 








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            dividends earned on the money in the fund.

          26)Establishes the Medical Marijuana Enforcement Penalty Account 
            (MMEPA) within the Medical Marijuana Fund, which is to receive 
            the fines collected when a medical marijuana facility operates 
            without an approved mandatory registration, and any other 
            penalty amounts levied under these provisions.

          27)Appropriates moneys in the fund, except for moneys in the 
            MMEPA, continuously and without regard to fiscal year to the 
            BMME solely to fully fund all costs associated with 
            implementing, enforcing, and administering this bill.

          28)Requires the BMME to reimburse the Department of Consumer 
            Affairs for administrative expenses.

          29)States that the BMME is subject to all applicable provisions 
            of Division 1 of the Business and Professions Code.

          30)Provides that the executive director shall appoint the BMME's 
            employees, except as specified.  All heads of divisions and 
            committees and other employees shall be responsible to the 
            executive director for the proper carrying out of their duties 
            and responsibilities.

          31)Allows the executive director to bring an action to enjoin a 
            violation or threatened violation of any provision of this 
            bill in the county of the violation.

          32)Prohibits a medical marijuana facility from operating without 
            state-approved registration.  Operation of a medical marijuana 
            facility without an approved mandatory registration may result 
            in fines of up to $25,000, and the destruction of any 
            marijuana being cultivated or possessed.

          33)Authorizes the BMME to establish various classes or types of 
            registrations for specific medical marijuana-related 
            activities.  

          34)Requires that a mandatory registration application or renewal 
            be approved unless the BMME determines that any of the 
            following are true:

             a)   An applicant, or the medical marijuana facility location 
               for which the applicant is applying for mandatory 








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               registration, fails to meet the requirements of this bill 
               or any regulation promulgated pursuant it;

             b)   An applicant is under 21 years of age;

             c)   An applicant has failed to provide information 
               reasonably necessary for completion of registration or has 
               knowingly provided false information on the application 
               form;

             d)   An applicant, or any of its officers or directors, has 
               been convicted in the previous five years of a violent 
               felony, as specified in Penal Code Section 667.5, a serious 
               felony, as specified in Penal Code Section 1192.7, a felony 
               involving fraud or deceit, or any other felony that, in the 
               BMME's estimation, would impair the applicant's ability to 
               appropriately operate a medical marijuana facility;

             e)   An applicant is a licensed physician making patient 
               recommendations for medical marijuana; or

             f)   An applicant, or any of its officers or directors, has 
               been sanctioned by the BMME for operating an unregistered 
               medical marijuana facility or has had a mandatory 
               registration revoked in the previous three years.

          35)Mandates the BMME to make mandatory registration applications 
            available by July 1, 2013.

          36)Requires the BMME to thoroughly investigate to determine 
            whether the applicant or the premises meets specified 
            criteria.

          37)Requires the BMME to deny an application for registration if 
            either the applicant or the premises do not meet the specified 
            eligibility criteria.

          38)Requires the BMME to approve or deny applications within 180 
            days after its filing; and if the BMME fails to act within 
            this time the application shall be deemed approved.

          39)Provides that each mandatory registration application 
            approved by the BMME is separate and distinct, and that an 
            applicant may apply for a mandatory registration in more than 
            one class of specific medical marijuana activities.








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          40)Provides that approved registrations are valid for a period 
            not to exceed two years unless suspended or revoked.  

          41)Requires the BMME to notify a registrant 90 days before a 
            registration's expiration by first class mail.

          42)Requires persons applying for the renewal of existing 
            registrations to apply at least 60 days before expiration; the 
            BMME has discretion to waive this time requirement.  

          43)Requires the BMME to act on timely renewal applications at 
            least 10 days prior to expiration.

          44)Allows a medical marijuana facility operating in conformance 
            with local zoning requirements as of this bill's effective 
            date to continue its operations until its application for 
            mandatory registration has been approved or denied.

          45)States that a person whose registration application has been 
            approved shall not be subject to arrest, prosecution, or other 
                                            criminal, civil, or administrative sanctions under state or 
            local law for approved actions in accordance with his or her 
            registration application.

          46)Provides that nothing in this bill shall prevent a city, 
            county, or city and county from enforcing a zoning ordinance 
            or law of general application, except as specified in this 
            bill.

          47)Prohibits state or local officials from spending any funds to 
            assist federal authorities in enforcing marijuana prohibitions 
            with regard to activities carried out by persons complying 
            with this bill.  Nothing in this bill shall be construed to 
            limit a law enforcement agency's ability to investigate 
            unlawful activity related to a mandatory registrant.

          48)Authorizes a financial institution to provide lending 
            services to persons who mandatory registration applications 
            have been approved and to secure any such loans to those 
            persons with assets of those persons.  Any financial 
            institution owning or possessing medical cannabis or warehouse 
            receipts as security for an obligation or as a result of 
            enforcement of a security interest may, after the BMME has 
            given permission, sell the medical cannabis or warehouse 








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            receipts to a registrant authorized to sell for resale that 
            medical cannabis or those warehouse receipts.

          49)Authorizes county board of supervisors to levy, increase, or 
            extend one or more transactions and use taxes on the sale of 
            medical marijuana or medical marijuana-infused products at a 
            rate of ____%, or a multiple thereof, if approved by 
            two-thirds of the members of the BMME of supervisors and by a 
            majority of the voters of that county.   The authority of a 
            city to impose transactions and use taxes under this section 
            shall not exceed the rate of 2.5%.

          50)Authorizes governing bodies of cities to levy, increase, or 
            extend a transaction and use tax at a rate of ____%, or a 
            multiple thereof, if approved by two-thirds of the members of 
            the governing body and by a majority of the voters of that 
            city.  The authority of a city to impose transactions and use 
            taxes under this section shall not exceed the rate of 1%.

          51)Provides that the provisions of this bill are severable.  If 
            any provision of this bill or its application is held invalid, 
            this invalidity shall not affect other provisions or 
            applications that can be given effect without the invalid 
            provision or application.

           EXISTING LAW  :

          1)States that the People of the State of California hereby find 
            and declare that the purposes of the Compassionate Use Act of 
            1996 are as follows:

             a)   To ensure that seriously ill Californians have the right 
               to obtain and use cannabis for medical purposes where that 
               medical use is deemed appropriate and has been recommended 
               by a physician who has determined that the person's health 
               would benefit from the use of cannabis in the treatment of 
               cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, 
               arthritis, migraine, or any other illness for which 
               cannabis provides relief.

             b)   To ensure that patients and their primary caregivers who 
               obtain and use cannabis for medical purposes upon the 
               recommendation of a physician are not subject to criminal 
               prosecution or sanction.









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             c)   To encourage the Federal and State governments to 
               implement a plan to provide for the safe and affordable 
               distribution of cannabis to all patients in medical need of 
               cannabis. İHealth and Safety Code (HSC) Sections 
               11362.5(b)(1)(A) to (C).]

          2)States that nothing in this section shall be construed to 
            supersede legislation prohibiting persons from engaging in 
            conduct that endangers others, nor to condone the diversion of 
            cannabis for nonmedical purposes.  İHSC Section 
            11362.5(b)(2).] 

          3)Provides that, notwithstanding any other provision of law, no 
            physician in California shall be punished, or denied any right 
            or privilege, for having recommended cannabis to a patient for 
            medical purposes.  İHSC Section 11362.5(c).]

          4)Defines "primary caregiver" as the individual designated by a 
            patient who has consistently assumed responsibility for the 
            housing, health, or safety of that person.  İHSC Section 
            11362.5(e).]

          5)States existing law, relating to the possession and the 
            cultivation of cannabis, shall not apply to a patient, or to a 
            patient's primary caregiver, who possesses or cultivates 
            cannabis for the personal medical purposes of the patient upon 
            the written or oral recommendation or approval of a physician. 
             İHSC Section 11362.5(d).]

          6)Requires the Department of Public Health to establish and 
            maintain a voluntary program for qualified patients to apply 
            for identification cards, and county health departments to 
            issue identification cards to qualified patients and their 
            caregivers.  İHSC Sections 11362.71(a) and (b)]. 

          7)Provides that persons with valid identification cards shall 
            not be subject to arrest for possession, transportation, 
            delivery, or cultivation of cannabis, absent evidence of 
            fraud.  İHSC Section 11362.71(e).] 

          8)Provides that patients and caregivers may possess and 
            cultivate an amount of cannabis reasonably necessary for the 
            patient's current medical needs, notwithstanding any limits 
            set by the Legislature that impermissibly amend the 
            Compassionate Use Act.  İPeople v. Kelly (2010) 47 Cal.4th 








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            1008, 1043.] 

          9)Requires a person who seeks an identification card to pay a 
            fee and provide to the county health department the person's: 
            name, proof of residency, written doctor's recommendation, 
            doctor's name and contact information, caregiver's name and 
            duties, and patient's and caregiver's government-issued photo 
            identification card.  İHSC Section 11362.715(a).] 

          10)Requires county health departments to issue serially numbered 
            identification cards to patients and caregivers containing: a 
            unique user identification number, an expiration date, the 
            county health department's name and telephone number, photo 
            identification of the cardholder, and a toll-free Department 
            of Public Health telephone number enabling state and local law 
            enforcement officers to immediately verify the card's 
            validity.  İHSC Section 11362.735(a).]

          11)Prohibits state or local law enforcement officers from 
            refusing to accept an identification card unless the officer 
            has reasonable cause to believe that the card is being used 
            fraudulently or its information is false or fraudulent.  İHSC 
            Section 11362.78.]

          12)Provides that qualified patients, persons with valid 
            identification cards, and their designated primary caregivers 
            who associate in order collectively or cooperatively to 
            cultivate cannabis are not subject to criminal liability on 
            that basis.  İHSC Section 11362.775.]

          13)Prohibits medical cannabis dispensaries that possess, 
            cultivate, or distribute cannabis from being located within a 
            600-foot radius of a school, and authorizes cities and 
            counties to further restrict the locations of medical cannabis 
            collectives.  (HSC Section 11362.768.)

          14)Provides a legal defense for medical cannabis collectives and 
            cooperatives to charges of cannabis distribution.  İPeople v. 
            Urziceanu (2005) 132 Cal.App.4th 747.]  

           FISCAL EFFECT  :   Unknown

           COMMENTS  :   

           1)Author's Statement  :  According to the author, "Just over 15 








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            years ago, the voters of California spoke loud and clear 
            through the passage of Prop. 215 that they wanted to establish 
            and ensure the safe, affordable access of medical cannabis to 
            patients.  It was the first such law of its kind in the nation 
            but since 1996, fifteen other states and the District of 
            Columbia have joined California and passed medical cannabis 
            laws.  But while the initiative called for an effective 
            regulatory framework, the Legislature has only enacted SB 420, 
            which calls for voluntary patient and caregiver identification 
            cards with certain limits, leaving may areas undefined; this 
            ambiguity is causing a  lot of confusion and problems.  Many 
            counties with an active medical cannabis community, such as 
            San Francisco and Alameda, have had strong regulatory systems 
            in place for some time; but unfortunately, not every county or 
            jurisdiction has enacted them.  It is now time to end this 
            public policy grey area with statewide regulation for medical 
            cannabis.

          "AB 2312 creates an oversight body within the Department of 
            Consumer Affairs to oversee all parts of this industry, except 
            for individual patients.  Growers, processors, manufactures, 
            testing and labeling providers, transporters, retailers, and 
            delivery services will all be required to register with the 
            state.  This information will ensure that every aspect of this 
            chain will be tracked, from growers all the way to storefront 
            dispensaries, creating a network of accountability and 
            transparency that does not exist today.  Providers who are 
            engaged in above-board operations will have nothing to fear as 
            this will allow law enforcement to effectively utilize their 
            limited resources by focusing their efforts on the remaining 
            bad actors.

          "There is no doubt that an industry exists around medical 
            cannabis but the point of regulation is to bring these 
            activities above board to ensure safe and effective access 
            with clear rules for those engaged in this industry.  Only by 
            regulating it through AB 2313 will California be able to 
            regain control.  Strict regulation of medical cannabis 
            benefits everyone - patients, providers, doctors and law 
            enforcement.

          "The worst public policy choice for California is to sit idly by 
            doing nothing and let this failed 'war on medical cannabis' 
            continue unchecked.  Failed prohibition policies have been 
            proven time and again to cause more harm than good, draining 








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            our limited public resources and encouraging black market 
            problems, such as robberies and violence.

          "It is time for the Legislature to fix these ambiguities, 
            provide the safe and effective access to medical cannabis that 
            Prop. 215 intended, prevent diversion for non-medical uses, 
            and regulate and control an industry that has the clear 
            support of the people of California."

           2)Medical Cannabis Law at Present  :  California voters passed 
            Proposition 215, the Compassionate Use Act (CUA), in 1996.  
            The CUA prohibits prosecution for growing or using cannabis of 
            Californians who have the oral or written recommendation of 
            their doctors and these patients' caregivers.  The Legislature 
            sought to clarify this initiative in 2003 with SB 420, the 
            Medical Marijuana Program Act (MMPA).  The MMPA offered a 
            voluntary identification card which patients and caregivers 
            could obtain that would additionally protect them from arrest, 
            and set limits on the amounts of cannabis to be legally grown 
            and possessed.  In 2010, the California Supreme Court ruled in 
            People v. Kelly supra that the MMPA section limiting 
            quantities of cannabis is unconstitutional because it amends a 
            voter initiative.  Additionally, the U.S. Supreme Court ruled 
            in Gonzales v. Raich (2005) 545 U.S. 1 that the Federal 
            Government can enforce cannabis prohibition despite state 
            medical cannabis laws.

          Now, California patients who obtain a physician's oral or 
            written recommendation are protected from prosecution for 
            possessing or cultivating an amount of cannabis reasonably 
            related to their current medical needs, as are these patients' 
            caregivers.  Patients and caregivers who obtain a state MMP 
            identification card from their county health department are 
            protected from arrest and prosecution for possessing, 
            transporting, delivering, or cultivating cannabis.  Patients 
            and caregivers who engage in these activities remain liable 
            for federal arrest and prosecution, and those who operate 
            dispensaries face frequent federal enforcement actions.  

          Meanwhile, many city and county officials have expressed 
            confusion about the scope of state medical cannabis law, and 
            some have passed ordinances that have been overturned by the 
            courts.  For example, the City of Fresno bans dispensaries 
            altogether; although last month in Fresno County a permitting 
            structure went into effect that is so strict no dispensaries 








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            have applied.  The new county ordinance bans dispensaries in 
            unincorporated areas, greatly limits cultivation locations, 
            and requires cultivators to disclose patient information and 
            comply with law enforcement searches.  Two lawsuits are 
            currently pending in Fresno County Superior Court to challenge 
            the ordinance, one claiming it is preempted by state law and 
            the other claiming it is preempted by federal law.  İTwo 
            lawsuits challenge Fresno Co. medical marijuana rules, The 
            Fresno Bee (March 20, 2012).]

           3)This Bill Would Have the Effect of Creating Uniform 
            Regulations  :  First, this bill expressly authorizes patients 
            to associate to sell medical cannabis, immunize them from 
            arrest for doing so, and defines a "dispensary" as a place 
            where medical cannabis is sold.  This change would resolve 
            most of the confusion and controversy in Fresno, San 
            Francisco, and other cities and counties where elected 
            officials have expressed contradictory opinions about the 
            legality of activities related to medical cannabis.  

          Second, this bill creates a regulatory board centralized in the 
            state government and specifically task the board with 
            approving and denying dispensaries' registration applications, 
            and preempting local medical cannabis regulations.  This 
            change would have the effect of turning California's patchwork 
            of medical cannabis ordinances into a unified, blanket law.  
            This bill provides specificity on whether local governments 
            can prohibit dispensaries altogether:  cities and counties 
            must permit no fewer than one dispensary per 50,000 residents 
            absent explicit voter disapproval.  Thus, large cities such as 
            Fresno will be granted clarity on whether or not state law 
            allows dispensary bans.

          Third, this bill speaks to the question of disparate taxation 
            levels levied by cities and counties.  Currently, some cities 
            do not tax medical cannabis separately from their regular 
            municipal sales taxes.  Some cities have taxes rates similar 
            to the one proposed in this bill (such as Berkeley at 2.5%), 
            whereas some cities have much higher taxes (such as San Jose, 
            currently at 7% and authorized to rise as high as 10%).  This 
            bill establishes a uniform, statewide maximum for a 2.5% 
            transactions and use tax on medical cannabis and medical 
            cannabis-infused products, clearing up discrepancies among 
            medical cannabis tax rates across city and county lines.  









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           4)This Bill Does Not Conflict with Proposition 215  :  The voters 
            who approved the CUA endorsed the drafters' intent "to ensure 
            that patients and their primary caregivers who obtain and use 
            cannabis for medical purposes upon the recommendation of a 
            physician are not subject to criminal prosecution or 
            sanction."  (HSC Section 11362.5.)  The Legislature previously 
            sought to regulate medical cannabis by passing SB 420 
            (Vasconcellos), Chapter 93, Statutes of 2003, which limited 
            the quantities of cannabis patients may possess.  In People v. 
            Kelly, the Supreme Court found that a law placing a greater 
            burden on cannabis patients than the CUA did has an 
            unconstitutional amendment of the CUA.  However, no part of 
            this bill places a greater burden on patients than the CUA 
            did.  Rather, by providing for the uniform regulation of 
            medical cannabis, this bill makes the rules clearer for both 
            law enforcement and the medical cannabis community, resulting 
            in fewer arrests.

           5)Pending Litigation Could Conflict with this Bill  :  The 
            California Supreme Court has recently granted review in four 
            cases related to the rights of medical cannabis patients and 
            dispensaries:  Pack v. City of Long Beach (S197169) review 
            granted Jan. 18, 2012, formerly at (2011) 199 Cal.App.4th 
            1070; City of Riverside v. Inland Empire Patient's Health and 
            Wellness Ctr. (S198638), review granted Jan. 18, 2012, 
            formerly at (2011) 200 Cal.App.4th 885; Traudt v. City of Dana 
            Point (S197700) review granted Jan. 18, 2012, formerly at 
            (2011) 199 Cal.App.4th 886; and People v. G3 Holistic 
            (S198395), review granted Jan. 18, 2012, (non-published 
            opinion E051663).  These cases present issues concerning 
            preemption, under federal or state law, of local ordinances 
            regulating or banning the operation of medical marijuana 
            dispensaries and related activities, and standing to challenge 
            such ordinances.  Since the Supreme Court will soon rule on 
            the legality of regulations governing dispensaries, parts of 
            this bill could possibly be preempted.

           6)Arguments in Support  :  According to  Americans for Safe Access  , 
            "Research conducted by ASA and our experience to date show us 
            that sensible regulations preserve safe access to medical 
            cannabis, while reducing crime and complaints around 
            storefront facilities maintained by legally organized and 
            operated patient cooperatives and collectives.  By 
            establishing uniform standards and facilitating reasonable 
            local regulations, AB 2312 will help propagate the proven 








                                                                  AB 2312 
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            benefits of regulation statewide.  Additionally, the bill will 
            provide overdue clarity for local lawmakers, law enforcement, 
            and patients who cultivate or provide medical cannabis."

           7)Arguments in Opposition  :  According to the  California 
            Taxpayers Association  , "CalTax is opposed to AB 2312 because 
            it is proposed as a majority vote bill, in violation of 
            Proposition 26's two-thirds vote requirement.  The state 
            constitution requires a super majority vote whenever a 
            proposal may result in an individual or entity paying a higher 
            tax.  Also, this bill has the potential to allow local 
            governments to impose transactions (sales) and use taxes 
            beyond the two percent local rate limitation currently 
            authorized by existing law.  Each county and city could impose 
            a tax that exceeds the tax rate limit."

           8)Related Legislation  :  

             a)   AB 2465 (Campos) makes medical cannabis patient and 
               caregiver identification cards mandatory, requires patients 
               and caregivers to report where they intend to cultivate 
               cannabis, and requires medical cannabis dispensaries to 
               keep copies of members' identification cards.  AB 2465 is 
               being heard by this Committee today.

             b)   AB 1975 (Halderman) requires the Department of Pesticide 
               Regulation to develop guidelines to enforce state pesticide 
               regulations on medical cannabis cultivation.  AB 1975 is 
               pending referral by the Assembly Rules Committee.

             c)   AB 1300 (Blumenfield), Chapter 196, Statutes of 2011, 
               authorizes local governments to adopt ordinances regulating 
               the location, operation, or establishment of medical 
               cannabis dispensaries.

             d)   SB 847 (Correa) would have prohibited medical cannabis 
               dispensaries from being located within 600 feet of a 
               residential zone and authorized cities and counties to 
               enact different standards for dispensaries' distances from 
               residential zones.  SB 847 was vetoed.

           9)Prior Legislation  :  

             a)   AB 2650 (Buchanan), Chapter 603, Statutes of 2010, 
               prohibits any medical cannabis dispensary from being 








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               located within 600 feet of a school, and authorizes local 
               governments to further restrict dispensaries' locations.

             b)   People v. Kelly, 47 Cal.4th 1008 (2010), found 
               unconstitutional SB 420's restriction on the amount of 
               cannabis a patient may possess and cultivate, and found 
               that patients and caregivers may possess and cultivate an 
               amount of cannabis reasonably necessary for the patient's 
               current medical needs.

             c)   AB 2743 (Saldana), of the 2007-08 Legislative Session, 
               would have stated that it is the policy of California that 
               its agencies and agents not cooperate in federal raids and 
               prosecutions for cannabis related offenses if the target is 
               a qualified patient.  AB 2743 died on the Assembly's 
               Inactive File.

             d)   SB 420 (Vasconcellos), Chapter 875, Statutes of 2003, 
               established a voluntary registry identification card system 
               for patients and their caregivers, and limited the amount 
               of cannabis patients and caregivers may possess.

             e)   SB 847 (Vasconcellos), Chapter 750, Statutes of 1999, 
               established the Marijuana Research Act of 1999 and provided 
               that the Regents of the University of California, if they 
               elect to do so, may implement a three-year program, the 
               "California Marijuana Research Program", under which funds 
               would be provided for studies intended to ascertain the 
               general medical safety and efficacy of cannabis and, if 
               found valuable, to develop medical guidelines for the 
               appropriate administration and use of cannabis.

             f)   Proposition 215, of the November 1996 General Election, 
               prohibits prosecution for the possession and cultivation of 
               cannabis by a patient or a patient's primary caregiver with 
                                                      a physician's written or oral recommendation or approval.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          American Federation of State, County and
            Municipal Employees (AFSCME), AFL-CIO
          Americans for Safe Access
          California NORML (National Organization for the Reform of 








                                                                  AB 2312 
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          Marijuana Laws)
          Drug Policy Alliance
          Legal Services for Prisoners with Children
          United Food & Commerical Workers Western States Council

           Opposition 
           
          California District Attorneys Association
          California Narcotic Officers Association
          California Police Chiefs Association
          California State Sheriffs' Association
          California Taxpayers Association
          International Faith Based Coalition

           
          Analysis Prepared by  :    Jesse Stout / PUB. S. / (916) 319-3744