BILL ANALYSIS Ó
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|Hearing Date:June 25, 2012 |Bill No:AB |
| |2312 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Curren D. Price, Jr., Chair
Bill No: AB 2312Author:Ammiano
As Amended:May 25, 2012 Fiscal: Yes
SUBJECT: Controlled substances.
SUMMARY: Creates a nine-member Board of Medical Marijuana Enforcement
(Board) to regulate the medical marijuana industry and to collect fees
from medical marijuana businesses to be deposited into a new Medical
Marijuana Fund. Authorizes local taxes on medical marijuana up to 5%.
Existing law:
1)Provides that qualified patients, persons with valid identification
cards, and the designated primary caregivers of qualified patients
and persons with identification cards who associate within the State
of California in order to cultivate marijuana for medical purposes,
collectively or cooperatively, shall not, solely on that basis, be
subject to state criminal sanctions for the possession, sale,
transport, or other proscribed acts relating to marijuana. (Health
and Safety Code (HSC) § 11362.775)
2)Makes it a misdemeanor offense to, among other things fraudulently
represent a medical condition or provide any material misinformation
to a physician, health department designee, or to law enforcement,
for the purpose of falsely obtaining an identification card;
fraudulently use any person's identification card in order to
acquire, possess, cultivate, transport, use, produce, or distribute
marijuana; to counterfeits, tampers with, or fraudulently produce an
identification card; or breach any confidentiality requirements
pertaining to an identification card program. (HSC § 11362.81)
3)Establishes the Medical Marijuana Program Act, exempts qualified
patients who hold an identification card issued pursuant to the
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program, and the caregivers of those persons, from certain state
criminal sanctions related to the possession, cultivation,
transportation, processing, or use of limited amounts of marijuana,
as specified. (HSC § 11462.7 et seq.)
4) Establishes the Compassionate Use Act of 1996 (CUA), an initiative
measure, which prohibits prosecution for the possession or
cultivation of marijuana of a patient or a patient's primary
caregiver who possesses or cultivates marijuana for the personal
medical purposes of the patient upon the written or oral
recommendation or approval of a physician. (HSC § 11362.5)
5)States that the People of the State of California hereby find and
declare that the purposes of the CUA are as follows:
a) To ensure that seriously ill Californians have the right to
obtain and use marijuana 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 marijuana in the treatment of cancer, anorexia, AIDS,
chronic pain, spasticity, glaucoma, arthritis, migraine, or any
other illness for which marijuana provides relief.
b) To ensure that patients and their primary caregivers who
obtain and use marijuana for medical purposes upon the
recommendation of a physician are not subject to criminal
prosecution or sanction.
c) To encourage the Federal and State governments to implement a
plan to provide for the safe and affordable distribution of
marijuana to all patients in medical need of marijuana. (HSC §
11362.5 (b) (1) (A) to (C))
6) States that nothing in the CUA shall be construed to supersede
legislation prohibiting persons from engaging in conduct that
endangers others, nor to condone the diversion of marijuana for
nonmedical purposes. (HSC § 11362.5 (b) (2))
7) Provides that, notwithstanding any other provision of law, no
physician in California shall be punished, or denied any right or
privilege, for having recommended marijuana to a patient for
medical purposes. (HSC § 11362.5 (c))
8) Defines "primary caregiver" for purposes of the CUA as the
individual designated by a patient who has consistently assumed
responsibility for the housing, health, or safety of that person.
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(HSC § 11362.5(e).
9) States existing law, relating to the possession and the cultivation
of marijuana, shall not apply to a patient, or to a patient's
primary caregiver, who possesses or cultivates marijuana for the
personal medical purposes of the patient upon the written or oral
recommendation or approval of a physician. (HSC Section 11362.5
(d))
10)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.
(HSC § 11362.71 (a) & (b))
11)Provides that persons with valid identification cards shall not be
subject to arrest for possession, transportation, delivery, or
cultivation of marijuana, absent evidence of fraud. (HSC §
11362.71 (e))
12)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. (HSC §
11362.715 (a))
13)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. (HSC Section 11362.735
(a))
14)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. (HSC § 11362.78)
15)Provides that qualified patients, persons with valid identification
cards, and their designated primary caregivers who associate in
order collectively or cooperatively to cultivate marijuana are not
subject to criminal liability on that basis. (HSC § 11362.775)
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16)Prohibits medical marijuana dispensaries that possess, cultivate,
or distribute medical marijuana from being located within a
600-foot radius of a school, and authorizes cities and counties to
further restrict the locations of medical marijuana collectives.
(HSC § 11362.768)
17)Lists marijuana as a hallucinogenic substance in Schedule I of the
California Uniform Controlled Substances Act. (HSC § 11054 (d))
This bill:
1) Establishes the Medical Marijuana Regulation and Control Act.
2) Declares legislative intent to accomplish all of the following:
a) 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) 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) Prohibit the issuance and use of fraudulent or forged
physician's recommendations for medical marijuana;
d) Establish the Board to be located within the Department of
Consumer Affairs (DCA) 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) Fulfill the promise of the CUA of 1996 to "implement a plan
for the safe and affordable distribution of marijuana to all
patients in medical need of marijuana;"
f) Support the creation of a more appropriate schedule for
marijuana that recognizes its medical use in the State of
California;
g) Establish a statewide registration process to identify for
law enforcement which individuals and entities are exempt from
state law criminal penalties;
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h) 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.
a) Provides that the freedom from arrest, prosecution or
sanctions, above do not apply to those person who are not in
compliance with the registration requirements provided in this
bill.
b) Applies these provisions to all members of an entity formed
pursuant to the above provisions regardless of whether those
members contribute to any of the activities of the entity, and
regardless of whether the statewide registration procedure is
being implemented.
4) 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 CUA.
5) 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 the provisions of this
bill.
6) Defines the following terms:
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a) "Board" is the Board of Medical Marijuana Enforcement;
b) "Executive director" is the Executive Director of the Board;
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 Board pursuant to the provisions added by the bill;
f) "Mandatory registration" is a registration issued by the
Board 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
location or building where medical marijuana is grown by a
patient or his or her primary caregiver for the patient's
personal use and not for sale;
i) "Medical marijuana industry union" is a labor union which
has at its core retail, agriculture, food and processing, or
textiles, and whose members work in the medical marijuana
industry; and,
j) "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.
7) 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 CUA.
8) Requires a medical marijuana facility to operate in accordance
with this article. Individual patients and caregivers cultivating
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marijuana at their private residences for the patient's use who do
not sell or charge for the cultivation of marijuana are not
considered medical marijuana facilities, and are exempt from
mandatory registration.
9) 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.
10)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 lawfully enacted by 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; and,
c) A legislative body of a city or county with existing medical
marijuana regulations may provide to the Board a list of
regulated persons that it finds to be in good standing under its
local medical marijuana regulations 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.
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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. Persons found to not be in good
standing shall not automatically be deemed successful mandatory
registrants for purposes of this bill.
11) States that if a city or county does not enact a medical
marijuana dispensary zoning ordinance, medical marijuana
dispensaries and facilities in that jurisdiction shall be wholly
regulated by the Board pursuant to this article, and medical
marijuana dispensaries and facilities that are mandatory
registrants may locate in that jurisdiction in any location that
the Board finds to be appropriately zoned, subject to the
restrictions on proximity to schools.
12)Creates within the DCA a Board, administered by a governing body
as prescribed, and a civil executive officer appointed by the DCA
who shall be known as the "Executive Director" of the Board.
13)Provides that the funds for the establishment and support of the
Board shall be advanced as a loan by the DCA and shall be repaid by
the initial proceeds from fees collected from processing
applications, registrations, notices or reports required to be
submitted to the Board.
14)Requires the governing body of the Board to consist of the
following nine members: two licensed physician having experience
with clinical applications of medical marijuana appointed by the
Governor, one full-time peace officer appointed by the Governor,
one California resident 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, one qualified medical marijuana patient appointed by the
Senate Rules Committee, and one representative from a medical
marijuana industry union appointed by the Speaker of the Assembly.
15)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.
16)Provides that the authority responsible for appointing a member of
the governing body of the Board shall appoint each member within 90
days of the effective date of this bill.
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17)States that a majority of the total appointed membership of the
governing body of the Board shall constitute a quorum. Any action
taken by the governing body of the Board requires a majority vote
of the members present at the meeting of the governing body of the
Board, with a quorum being present, unless otherwise specifically
provided.
18)Mandates the governing body of the Board 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 Board.
19)States that the terms of the members of the governing body of the
Board shall be three calendar years, beginning on January 1 of the
year of appointment. The terms shall be staggered as specified,
and 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.
Each member shall be paid $100 per day, plus travel, lodging, and
meal expenses which are incurred for attending Board meetings or in
conducting Board business.
20)Requires the Board to perform all of the following:
a) Beginning on September 1, 2013, 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) Take any reasonable action with respect to a mandatory
registration application;
d) Impose penalties authorized by this article or by any rule
or regulation promulgated pursuant to this article;
e) 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
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to govern the procedures of the Board to exercise its powers and
perform its duties, beginning on July 1, 2013;
f) Hold public hearings to hear and decide any appeals from
denials of a mandatory registration application, and any
complaints against a registered person;
g) 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 § 11500 et
seq.;
h) 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 (HIPAA), 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.);
i) Develop any necessary forms, identification cards, and
applications for the administration of this article or any of
the rules or regulations promulgated pursuant it;
j) Develop zoning standards that shall be applicable if a city
or county does not enact a medical marijuana dispensary zoning
ordinance, beginning on July 1, 2013;
aa) Oversee operation of the Medical Marijuana Fund;
bb) Establish reasonable processing fees for all applications,
registrations, notices, or reports required to be submitted to
the Board. Such fees shall be deposited into the Medical
Marijuana Fund. The amount of fees shall reflect the Board'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
particular registrant.
21)Requires the regulations to be promulgated by the Board to be
reasonable and to include:
a) Procedures and grounds for issuing, renewing, denying,
suspending, issuing fines in connection with, restricting, or
revoking a mandatory registration;
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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 the 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;
aa) Establishment of a committee to advise the Legislature on the
rescheduling of marijuana under federal law and the California
Health and Safety Code; and,
bb) Any other regulations in furtherance of this article.
22) States that the Board is not authorized to set prices for medical
marijuana.
23) 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 dividends
earned on the money in the fund.
24)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
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levied under these provisions.
25)Appropriates moneys in the fund, except for moneys in the MMEPA,
continuously and without regard to fiscal year to the Board solely
to fully fund all costs associated with implementing, enforcing,
and administering this bill.
26)Requires the Board to reimburse the DCA for administrative
expenses.
27)States that the Board is subject to all applicable provisions of
Division 1 of the Business and Professions Code.
28)Provides that the Executive Director shall appoint the Board'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.
29)Allows the Executive Director, with the vote of a majority of the
Board members, to bring an action to enjoin a violation or
threatened violation of any provision of this bill in the county of
the violation.
30)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.
31)Authorizes the Board to establish various classes or types of
registrations for specific medical marijuana-related activities.
32)Requires that a mandatory registration application or renewal be
approved unless the Board 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 registration,
fails to meet the requirements of this bill or any regulation
promulgated pursuant it;
b) An applicant or any of its officers or directors is under 21
years of age;
c) An applicant has knowingly provided false information on the
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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 § 667.5, a serious felony, as specified
in Penal Code § 1192.7, a felony involving fraud or deceit, or
any other felony that, in the Board'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;
f) An applicant, or any of its officers or directors, has been
sanctioned by the Board for operating an unregistered medical
marijuana facility or has had a mandatory registration revoked
in the previous three years.
33)Mandates the Board to make mandatory registration applications
available by July 1, 2013.
34)Requires the Board to thoroughly investigate to determine whether
the applicant or the premises meets specified criteria.
35)Requires the Board to deny an application for registration if
either the applicant or the premises do not meet the specified
eligibility criteria.
36)Requires the Board to approve or deny applications within 180 days
after its filing; and, if the Board fails to act within this time
the application shall be deemed approved.
37)Provides that each mandatory registration application approved by
the Board is separate and distinct, and that an applicant may apply
for a mandatory registration in more than one class of specific
medical marijuana activities.
38)Provides that approved registrations are valid for a period not to
exceed two years unless suspended or revoked.
39)Requires the Board to notify a registrant 90 days before a
registration's expiration by first class mail.
40)Requires persons applying for the renewal of existing
registrations to apply at least 60 days before expiration; the
Board has discretion to waive this time requirement.
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41)Requires the Board to act on timely renewal applications at least
10 days prior to expiration.
42)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.
43)Provides that if at any time after July 1, 2013, the Board has not
met, is not accepting applications for mandatory registration, or
is not granting mandatory registrations in response to valid
applications, then a medical marijuana facility or dispensary
operating in compliance with applicable city or county ordinances
may continue to do so without a mandatory registration.
44)States that a person whose registration application has been
approved, and its agents, officers, directors, and employees acting
on its behalf, 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.
45)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.
46)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.
47)Prohibits penalizing under state law any financial institution
which provides lending services to persons whose mandatory
registration applications have been approved, secures loans to
those persons, or owns, possesses, or sells medical marijuana or
warehouse receipts as security for an obligation or as a result of
enforcement of a security interest.
48)Authorizes county board of supervisors to levy, increase, or
extend one or more transactions and use taxes on medical marijuana
or medical marijuana-infused products, if approved by two-thirds of
the members of the county board of supervisors and by a majority of
the voters of that county. Provides that the combined rate of all
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taxes imposed in any county pursuant to this bill shall not exceed
the combined rate of 5%.
49)Authorizes governing bodies of cities to levy, increase, or extend
a transaction and use tax, 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 2%.
50)Provides that, notwithstanding the "combined tax rate provision"
of the Revenue and Taxation Code, the tax rate authorized by this
bill will not be considered for the combined tax rate.
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.
FISCAL EFFECT: The Assembly Floor analysis dated May 25, 2012 notes
the following costs cited by the Assembly Appropriations Committee:
1) One-time startup and ongoing administrative costs, likely in the
hundreds of thousands of dollars, to the Board of Equalization
(BOE), potentially in excess of revenues.
BOE would incur one-time costs related to the startup of a new tax
program, in addition to ongoing costs to administer the program.
As BOE notes, one-time start-up costs will be the same, regardless
how many cities or counties levy the tax. Therefore, if only a few
cities or counties impose the tax, BOE administrative costs would
be paid from a smaller revenue base that may prove insufficient to
cover administrative costs, which creates General Fund pressure to
cover the difference.
2) Significant annual costs, likely in the millions of dollars, to
support a nine-member BMME within DCA to regulate the medical
marijuana industry. It is not clear these costs would be covered
by the application fees created by this bill, as the BMME will be
created regardless of the number of applications.
For purposes of comparison, DCA administers 23 boards, such as the
8-Personnel Years (PY), $2.8 million Acupuncture Board; the 14-PY,
$3.3 million Physical Therapy Board; and, the 12-PY, $2.8 million
Veterinary Medical Board. Given the detailed charges of the
proposed BMME, however, the costs may be more comparable to the
58-PY, $11.6 million 7-member Horse Racing Board, charged with
protecting the public's interests, licensing racing associations
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and participants, enforcing rules and regulations, acting as a
quasi-judicial body, and collecting revenues.
This bill would establish unspecified registration application fees,
assessed on a sliding scale to "reflect the projected revenue of
the particular registrant," to "reflect the direct and indirect
costs of the board." This bill would also authorize fines of up to
$25,000 for operating a medical marijuana facility without the
appropriate registration. The costs of the BMME would require
significant application renewal fees and fines. For purpose of
illustration, the average fee to cover the cost of an $11 million
board, if there were 1,500 annual applications and renewals, would
be about $7,500.
3) This bill creates a continuous appropriation from the Medical
Marijuana Fund (created by this bill) for purposes of supporting
the BMME. Continuous appropriations are contrary to the general
practice of the Legislature, which prefers annual budget review of
expenditures.
4) Moderate local revenue increase, potentially in the millions of
dollars, from an unspecified Transactions and Use Tax (TUT)
increase of up to 5% per county. Based on a 2009 BOE estimate that
the potential sales and use tax on marijuana would be about $400
million, based on a 9% rate (6% state, 2% local, 0.75% special
district, and 0.25% for fiscal recovery fund), if 20% of the
taxable sales amount was medicinal marijuana, and if one-half of
the state's counties, representing 50% of the state's population,
levied an average 4% TUT, the local revenue increase would be in
the range of $28 million.
5) Unknown, non-reimbursable local election costs to the extent cities
and counties opt to hold elections on proposed tax increases.
Unconsolidated elections generally cost in the hundreds of
thousands of dollars, depending on the jurisdiction.
6) Unknown, minor local savings from prohibiting local law enforcement
from spending any funds to assist federal law enforcement in
enforcing marijuana prohibitions.
COMMENTS:
1.Purpose. This bill is sponsored by the UFCW Medical Cannabis and
Hemp Division , Emerald Growers Association , and Americans for Safe
Access (Sponsors) to create the Board of Medical Marijuana
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Enforcement within the DCA to oversee and regulate the medical
marijuana industry in California. The bill would also authorize
local governments to impose an excise tax.
According to the Author: "The Compassionate Use Act of 1996
(Proposition 215), SB 420 (Vasconcellos, 2004), and 2008 Attorney
General Guidelines authorize medical cannabis activity and generally
exempts a number of marijuana activities from criminal prosecution,
but provides little guidance for implementation to state and local
governments, while calling on the state to 'implement a plan to
provide for the safe and affordable distribution of marijuana to all
patients in medical need of marijuana' (HSC § 11362.5)."
The Author further states the need for the bill as follows:
"Despite the passage of the Compassionate Use Act of 1996 and the
Medical Marijuana Program Act (SB 420, Vasconcellos, Chapter 875,
Statutes of 2003), because there is no effective statewide system
for regulating and controlling medical marijuana, local governments
have been confronted with uncertainty about the legality of some
medical marijuana cultivation and distribution activities, and many
cities and counties have passed local ordinances that in some cases
ban the cultivation or distribution of medical marijuana.
"Greater certainty and uniformity are urgently needed regarding the
rights and obligations of medical marijuana facilities, and for the
imposition and enforcement of regulations to prevent unlawful
cultivation and the diversion of marijuana to non-medical use."
2.Background. Sixteen years ago, California voters passed Proposition
215 , the CUA 1996 (HSC § 11362.5.). The CUA established the right
of patients to obtain and use marijuana to treat specified illnesses
and any other illness for which marijuana provides relief. The CUA
prohibits prosecution for growing or using marijuana for
Californians who have the oral or written recommendation of their
doctors, and their patients' caregivers.
Additionally, the CUA specifically protects physicians who recommend
the use of marijuana to patients for medical purposes and exempts
qualified patients and their primary caregivers from California drug
laws prohibiting possession and cultivation of marijuana.
The CUA is a very general law. It establishes the right of a patient
to obtain medical marijuana pursuant to a physician's
recommendation. The initiative then simply encourages the state and
federal governments to "implement a plan for safe and affordable
AB 2312
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distribution of marijuana Ýto qualified patients]."
The Legislature sought to clarify this initiative in 2003 with SB 420,
the Medical Marijuana Program Act. The Medical Marijuana Program
Act 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 marijuana to be legally
grown and possessed. In 2010, the California Supreme Court ruled in
People v. Kelly supra that the Medical Marijuana Program Act section
limiting quantities of marijuana 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 marijuana prohibition despite state medical
marijuana laws.
California patients who obtain a physician's oral or written
recommendation are now protected from prosecution in California for
possessing or cultivating an amount of marijuana reasonably related
to their current medical needs, as are their caregivers. Patients
and caregivers who obtain a state Medical Marijuana Program
identification card from their county health department are
protected from arrest and prosecution for possessing, transporting,
delivering, or cultivating marijuana. 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 marijuana law, and some have passed
ordinances that have been overturned by the courts. For example,
the City of Fresno bans dispensaries altogether; although earlier
this year in Fresno County a permitting structure went into effect
that is so strict that no dispensaries 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. ÝTwo lawsuits
challenge Fresno Co. medical marijuana rules, The Fresno Bee (March
20, 2012).]
It has been argued that very little has been done to implement the
initiative. (McCabe, "It's High Time: California Attempts to Clear
the Smoke Surrounding the Compassionate Use Act," (2004) 35 McGeorge
L. Rev. 545, 546) Instead of a comprehensive implementation plan,
AB 2312
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numerous uncoordinated bills have been introduced in the
Legislature. Further, the courts have only provided a small measure
of clarity and certainty in this area.
3.The Compassionate Use Act and Federal Law Remains in Conflict. This
bill seeks to establish a comprehensive state regulatory scheme for
the registration and regulation of medicinal marijuana. California
voters enacted the CUA in 1996, in order to permit the use of
marijuana for medical purposes by persons deemed qualified by their
physicians. Marijuana was then, and still is, an illegal drug both
under federal and state law, and its use, possession, distribution,
cultivation, or sale carries criminal penalties. However, under
federal law, possession of marijuana, even by medical users,
continues to be a crime. The federal Controlled Substances Act
provides that, except as provided, it is unlawful for any person
knowingly or intentionally to manufacture, distribute, or dispense,
or possess with intent to manufacture, distribute, or dispense a
controlled substance. (21 U.S.C. Sec. 841(a)) The only exception
provided in the Controlled Substances Act for marijuana, a Schedule
I drug, is for its use in government-controlled research projects.
Lawsuits filed by the United States against "medical cannabis
dispensaries" have resulted in the complete rebuke of efforts by
supporters of medical marijuana use to create a "medical necessity"
exception to the Controlled Substances Act's prohibition on
manufacturing and distributing marijuana. (United States v. Oakland
Cannabis Buyers' Cooperative et al. (2001) 532 U.S. 483, 491-485.)
4.This Bill Seeks to Create Uniform Regulation. First, this bill
expressly authorizes patients to associate to sell medical marijuana
and immunizes them from arrest for doing so, and defines a
"dispensary" as a place where medical marijuana is sold. This
change is intended to resolve a measure of the confusion and
controversy in Fresno and other cities and counties where elected
officials have expressed contradictory opinions about the legality
of activities related to medical marijuana.
Second, this bill creates a centralized regulatory board in state
government, the BMME within the DCA, and specifically tasks the
Board with approving and denying dispensaries' registration
applications, and preempts local medical marijuana regulations.
This change is intended to have the effect of turning California's
patchwork of medical marijuana ordinances into a unified, blanket
law. This bill further seeks to provide specificity on whether
local governments can prohibit dispensaries altogether; under the
bill, cities and counties must permit no fewer than one dispensary
AB 2312
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per 50,000 residents absent explicit voter disapproval. Thus,
larger cities such as Fresno will be granted clarity on whether or
not state law allows dispensary bans.
Third, this bill seeks to address the issue of disparate taxation
levels levied by cities and counties. Currently, some cities do not
tax medical marijuana separately from their regular municipal sales
taxes. Some cities have tax 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 combined 5% transactions and use tax on medical
marijuana and medical marijuana-infused products, clearing up
discrepancies among medical marijuana tax rates across city and
county lines.
5.This Bill Does Not Appear to Conflict with Proposition 215. The
voters who approved the CUA of 1996 endorsed the drafters' intent
"to ensure that patients and their primary caregivers who obtain and
use marijuana 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 marijuana by passing SB 420 (Vasconcellos, Chapter 93,
Statutes of 2003) which limited the quantities of marijuana patients
may possess. In People v. Kelly, the Supreme Court found that a law
placing a greater burden on marijuana patients than did the CUA of
1996 is an unconstitutional amendment of the CUA of 1996. However,
unlike SB 420, no part of this bill places a greater burden on
patients than did the CUA of 1996. Rather, by seeking to provide
for the uniform regulation of medical marijuana, this bill purports
to make the rules clearer for both law enforcement and the medical
marijuana community, arguably resulting in fewer arrests.
6.Pending Litigation. The California Supreme Court has recently
granted review in several cases related to the rights of medical
marijuana patients and dispensaries: Pack v. City of Long Beach
(review granted Jan. 18, 2012, S197169), City of Riverside v. Inland
Empire Patient's Health and Wellness Ctr. (review granted Jan. 18,
2012, S198638), and People v. G3 Holistic (review granted Jan. 18,
2012, S198395). All of these cases deal with the legality of local
rules regarding the operation and location of dispensaries and
cultivation sites. Since the Supreme Court may soon rule on the
legality of regulations governing dispensaries, parts of this bill
could possibly be affected.
7.Attorney General's Compassionate Use Guidelines. In 2003, the
AB 2312
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Legislature enacted additional legislation relating to medical
marijuana. One of those statutes (SB 420, Vasconcellos, Chapter
875, Statute of 2003) requires the Attorney General to adopt
"guidelines to ensure the security and nondiversion of marijuana
grown for medical use"
(HSC § 11362.81 (d)). To fulfill this mandate, in August 2008, the
California Attorney General published "Guidelines for the Security
and Non-Diversion of Marijuana Grown for Medical Use." (Guidelines
for the Security and Non- Diversion of Marijuana Grown for Medical
Use, Cal. Attorney General. Aug. 2008; hereinafter, Guidelines).
The Guidelines are intended to: (1) ensure that marijuana grown for
medical purposes remains secure and does not find its way to
non-patients or illicit markets, (2) help law enforcement agencies
perform their duties effectively and in accordance with California
law, and (3) help patients and primary caregivers understand how
they may cultivate, transport, possess, and use medical marijuana
under California law.
8.Recent Federal Enforcement. Over the past year, federal law
enforcement has begun to crack down on California medical marijuana
dispensaries by employing laws traditionally used to target money
transfers by narcotic traffickers. A June 15, 2012 report in the
Sacramento Bee details the Internal Revenue Service (IRS) seizure of
bank accounts that the IRS says took in more than $870,000 in
cumulative deposits in recent months, part of a federal
investigation into alleged money laundering involving the Sacramento
medical marijuana dispensary, El Camino Wellness Center, which is
considered the largest medical marijuana provider in Sacramento.
The raid is part of the ongoing crackdown by federal officials
announced last October by U.S. prosecutors indicating that they
would target purportedly nonprofit California dispensaries that they
charged were "hijacked by profiteers." Since that time, an
estimated 400 dispensaries closed in the state amid threats of
prosecution, according to the Sacramento Bee.
Since that time, authorities have arrested three operators of a chain
of medical marijuana stores in Upland, Colton and Moreno Valley in
Southern California after the operators were indicted on federal
drug trafficking charges, according to a later report in the
Sacramento Bee.
In a June 20, 2012 rally protesting the recent federal actions and
supporting the medical marijuana dispensaries at the Sacramento
Federal Courthouse, a spokesman for the United Food and Commercial
Workers Union, which represented El Camino Wellness Center workers,
AB 2312
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said 45 employees lost their jobs in the Sacramento raid, and
further indicated that dispensary closures have cost about 3,000
total jobs statewide (Peter Hecht (2012, June 21) Rally at
Sacramento federal courthouse questions fairness of marijuana raids,
Sacramento Bee.
This recent event underscores the uncertainty and the pressures that
exist between conflicting federal regulation and California
regulation in the matter of medical marijuana.
9.Sunrise Issue for this Committee. The Legislature uses a "Sunrise
Model" for the purpose of assessing requests for new or increased
occupational regulation, including the creation of any new licensing
scheme or licensing board within the DCA.
Government Code Sections 9148 et seq. require that "Prior to
consideration by the Legislature of legislation . . . creating a new
category of licensed professional, a plan for the establishment and
operation of the proposed . . . new category of licensed
professional shall be developed by the author or sponsor of the
legislation." The Code further states: "The necessary data and
other information required by this section shall be provided to the
Legislature with the initial legislation and forwarded to the policy
committees in which the bill will be heard."
Correspondingly, the Committee Rules of the Senate Business,
Professions and Economic Development Committee requires: "Prior to
hearing any bill or other measure that proposes to create a new
state licensing agency or a new category of licensed or regulated
professional, the author or sponsor of the legislation shall develop
a plan for the establishment and operation of the agency or creation
of the new licensed category in accordance with the requirements of
Government Code § 9148 et seq. The plan shall include the
completion of an occupational regulation proposal review worksheet
titled the 'Sunrise Questionnaire' by the author or sponsor of the
legislation."
This questionnaire is designed to assist proponents of new regulatory
programs to collect and organize information that is necessary for
an objective evaluation of the need and justification for the
proposal. If a new program is to be established within the DCA or
any other agency under this committee's jurisdiction, the committee
must have all the information requested in the questionnaire in
order to properly evaluate and respond to the proposal.
AB 2312
Page 23
Typically the completion of the Sunrise process is a multi-year
effort, with meetings and hearings being convened during the fall
Interim Recess in order for the Committee to hear testimony from the
stakeholders in a legislative proposal, including both the
proponents and the opponents. This enables the Committee to
ascertain the level of need for regulation, the type of regulation
that is needed, any impediments to adopting the proposed regulatory
scheme, and whether the proposed regulation is adequate to address
the identified level of consumer harm, and is the least onerous way
to efficiently regulate in that area.
In response to the Committee's request, the Author's office has
completed a sunrise questionnaire. As stated earlier, the
consideration of a sunrise proposal is intended to be a deliberative
process; therefore this analysis is only able to briefly touch upon
the responses to the questionnaire.
a) The overall case for the proposed regulation. "The
practitioners defined in AB 2312 are medical cannabis industry
employees: cultivators, processors, manufacturers, labelers,
transporters and distributors. While physicians and patients are
also part of this system, the targeted practitioners of this bill
and proposed regulatory system are those involved in the industry
side of medical cannabis.
"Prior to 1996, the activities of these practitioners were illegal,
but the CUA of 1996 (Proposition 215), SB 420 (Vasconcellos,
2004), and 2008 Attorney General Guidelines authorize medical
cannabis activity but provide little guidance for implementation
to state and local governments, while calling on the state to
'implement a plan to provide for the safe and affordable
distribution of marijuana to all patients in medical need of
marijuana' ÝHealth & Safety Code §11362.5, H1-H11].
"There is a great need for the state to regulate these activities
in order to protect consumers (patients), maintain public safety,
and provide guidance to local governments who are responsible for
zoning and other local responsibilities. The safe and legal
access to cannabis is the reason dispensaries have been created
by patients and caregivers around the state. For many people,
dispensaries remove significant barriers to obtaining cannabis.
Patients in urban areas with no space to cultivate cannabis,
those without the requisite gardening skills to grown their own,
and most critically, those who face the sudden onset of a serious
illness or who have suffered a catastrophic illness- all tend to
rely on dispensaries as a compassionate, community-based solution
AB 2312
Page 24
as a preferable alternative to potentially dangerous illicit
market transaction.
"Because of the ambiguity in current law and lack of a regulatory
structure, law enforcement resources can be drained for no
legitimate or legal reason, when these disputes can be avoided by
a clear set of rules. Lack of regulation also may invite violent
and property crimes targeting those involved in the industry,
creating public safety risks that are avoidable."
b) The provision of the proposed regulation that would preclude
consumer injury.
Regulating persons involved in the medical marijuana industry,
and ensuring that regulated entities follow appropriate
regulations regarding cultivation, processing, and manufacturing
practices ÝHealth & Safety Code §11362.87].
The ability for the board to establish testing and labeling
standards for medical cannabis products, and security protocols
for facilities ÝHealth & Safety Code §11362.882].
Maintaining safe and affordable access for patients across
California ÝInter alia, Health & Safety Code §11362.87].
Providing protections for banking entities who maintain accounts
for medical cannabis businesses, reducing cash kept on hand which
can be a target for criminals ÝInter alia, Health & Safety Code
§11362.93].
Allowing the state to identify and track persons involved in the
medical cannabis industry to ensure that business entities are
not run by criminal enterprises ÝHealth & Safety Code §11362.91].
Allowing cities and counties to enact zoning standards based on
local needs and conditions to address public safety and other
relevant issues ÝInter alia, Health & Safety Code §11362.882].
c) The consumer harm of not regulating in this area. The lack of
access by patients to medicinal marijuana, which may be a key
element is relieving pain suffered by illness.
d) Other states which regulate in this area. Alaska, Arizona,
Colorado, Connecticut, Delaware, District of Colombia, Hawaii,
Maine, Maryland, Michigan, Montana, Nevada, New Jersey, New
Mexico, Oregon, Vermont, Rhode Island, and Washington all have
medical marijuana laws. Of the eleven states that allow
dispensaries, seven have registration programs for these
AB 2312
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operations.
e) The extent to which individual practitioners make professional
judgments. Providers may divert cannabis into non-medical
systems or markets, but this is not necessarily a "professional"
judgment, but the result of strong criminal temptation. Also,
the use of chemicals such as herbicides and pesticides in the
cultivation and processing of medical cannabis have a strong
potential to do harm to patients.
f) Similar occupations regulated in California. Alcohol
manufacturers and distributors, tobacco retailers, pharmaceutical
manufacturers and pharmacy workers, and some agricultural
workers.
10.Policy Issue : Is the Department of Consumer Affairs (DCA) the
Appropriate Agency for the Regulatory Program? This bill proposes
to establish a Board of Medical Marijuana Enforcement located within
the DCA. The stated purpose in the bill is to provide a
governmental agency that will ensure the strict, honest, impartial,
and uniform administration and enforcement of the medical marijuana
laws throughout California. Since there can admittedly be a strong
association with illegal activity, including diversion for
non-medicinal use, fraudulent use, money laundering, associated
criminal activity, drug exploitation and abuse, the regulatory board
does not clearly appear to be appropriately placed within the DCA.
The DCA, in the State and Consumer Services Agency oversees more than
36 boards, bureaus, committees, and a commission, and programs that
regulate more than 240 professional categories, including doctors,
nurses, dentists, engineers, architects, contractors, cosmetologists
and automotive repair facilities, among others. These regulatory
entities license, register, or certify more than 2.5 million
professionals and health care practitioners, investigate complaints,
and discipline violators. They also administer licensing laws which
establish the minimum qualifications and levels of competency for
licensure, establish education and experience requirements,
including professional licensing examinations that assess skills,
knowledge and abilities of candidates for professional licenses.
The licensing laws which they oversee are largely administrative
licensing and regulatory acts. On the other hand, the Board
proposed by this bill, is by its very name an "Enforcement" agency,
and should be approached as such. As such, it appears that the
regulation of the medical marijuana industry may be more
appropriately regulated by an occupational or business entity, with
strong law enforcement oversight.
AB 2312
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Consideration should be given as to whether the Board should be
placed within the Department of Public Health (DPH). DPH already
plays a role under the law in the field of medical marijuana. As
noted in "Existing law" above, Health and Safety Code § 11362.71
requires the DPH 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. The law further 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 DPH telephone number enabling state and local law
enforcement officers to immediately verify the card's validity.
(HSC Section 11362.735).
An additional viable alternative may also be to place the Board
within the jurisdiction of the Department of Alcoholic Beverage
Control (ABC). The nature of ABC's jurisdiction already deals
cooperatively with local communities, and carries out licensing,
enforcement and regulatory mandates. ABC further has both sworn
(peace officer) and non-sworn (analytical) staff that conduct
licensing and investigatory activities.
11.Related Legislation. SB 1182 (Leno, 2012) provided that a
cooperative or collective that operates within the Attorney
General's (AG) shall not be subject to prosecution for marijuana
possession or commerce, as specified; and provides that where such
an entity operates within the AG's guidelines, the entity and its
employees, officers and members shall not be subject to prosecution
for marijuana commerce because the entity or its employees,
officers, or members received compensation for actual expenses
incurred in carrying out activities in compliance with the
guidelines. Died on Senate Floor.
SB 129 (Leno, 2012) prohibits employment discrimination on the basis
of a person's status as a qualified patient (medical marijuana user)
or on the basis of the person's positive drug test for marijuana,
provided the person is a qualified patient and the medical use of
marijuana does not occur at the place of employment or during hours
of employment. On Senate Inactive File.
AB 223 (Ammiano, 2011) would provide that the Compassionate Use Act of
1996 does not authorize a qualified patient or person with an
identification card to engage in the smoking of medical marijuana
within 600 feet of the grounds of a school, recreation center, or
AB 2312
Page 27
youth center, unless the medical use occurs within a residence or
within a medical marijuana cooperative, collective, or dispensary.
Stated legislative intent. Died in Assembly Public Safety
Committee.
AB 2465 (Campos, 2012) makes medical marijuana patient and caregiver
identification cards mandatory, and requires medical marijuana
collectives to keep copies of members' identification cards.
Referred to Assembly Public Safety Committee.
AB 1017 (Ammiano, 2011) made the cultivation of marijuana
alternatively punishable as a misdemeanor with a penalty of
imprisonment in a county jail for a period of not more than one
year. Failed passage on Assembly Floor.
SB 626 (Calderon, 2011) would require the Board of Equalization (BOE)
to establish a nine-member task force to conduct a study to
determine ways to enhance collections of sales and use taxes on
retail sales of marijuana and ensure proper regulation of the
cultivation, transportation, and distribution of marijuana and
marijuana products. Held in Senate Appropriations Committee.
SB 847 (Correa, 2011) prohibited any medical marijuana entity that
possesses, cultivates, or distributes MM from locating within 600
feet of a residential area unless a local ordinance has been adopted
to specifically regulate the location of these entities in relation
to residential use. Vetoed by Governor Brown.
SB 1098 (Migden, 2008) would require the State Board of Equalization
to administer a tax amnesty program, as specified, for medical
marijuana dispensaries, as defined. Died in Senate Revenue and
Taxation Committee.
SB 529 (Migden, 2007) required the Board of Equalization to administer
a tax amnesty program, as specified, for medical marijuana
dispensaries. Gutted and amended to different subject.
SB 420 (Vasconcellos, Chapter 875, Statute of 2003) established the
Medical Marijuana Program Act, a statewide, voluntary program for
the issuance of identification cards to identify persons authorized
to engage in the medical use of marijuana under the Compassionate
Use Act of 1996.
AB 1300 (Blumenfiled, Chapter 196, Statutes of 2011) provided that a
local government entity may enact an ordinance regulating the
location, operation or establishment of a medical marijuana
AB 2312
Page 28
cooperative or collective; authorized local government entity to
enforce such ordinances through civil or criminal remedies and
actions; and authorized a local government entity to enact any
ordinance that is consistent with the Medical Marijuana Program.
The bill did not directly regulate medical marijuana facilities.
Arguably, the bill simply restated long-standing law on the power of
local entities to adopt ordinances that protect public safety,
health and welfare.
AB 2650 (Buchanan, Chapter 603, Stats. 2010) prohibited operation or
establishment of a medical marijuana cooperative, collective,
dispensary or provider within 600 feet of a school; provided that
ordinances adopted prior to January 1, 2011 regulating the location
or establishment of such a medical marijuana entity shall not be
preempted by this bill; and authorized a local entity to only adopt
an ordinance that restricts the location or establishment of a
medical marijuana entity "further" than those entities are
restricted by this bill.
12.Arguments in Support. The Marijuana Policy Project (MPP) believes
the bill would bring much needed clarity to what is currently and
uncertain legal landscape. MPP argues that creating a uniform and
well-regulated program across the state would benefit patients,
providers, and members of law enforcement, and more closely align
California law with regulation in New Mexico, Colorado, and Maine.
These three states thoroughly regulate their medical marijuana at
the state level.
Legal Services for Prisoners with Children (LSPC) states, "Though not
without any negative health effects, marijuana has generally been
shown to be less harmful than its legal cousin alcohol. It has also
been shown to have medicinal qualities of significant import."
American Federation of State, County and Municipal Employees (AFSCME)
AFL-CIO supports the bill stating the bill creates a uniform
standard for the regulation of this industry, which is now regulated
by a hodge-podge of local regulatory schemes. The bill will ensure
that there is a source of revenue from the industry. AFSCME states
that it is actively organizing workers in this industry and believes
that the jobs created in the medical cannibals industry will be
high-wage, middle class jobs with good benefits.
The Drug Policy Alliance supports the bill stating that it is
important to pass the bill to fulfill the promise of the
Compassionate Use Act which California voters approved by a 56%
AB 2312
Page 29
majority vote in 1996. In the absence of clear regulations, and
driven by fear of federal interference, over 100 California
municipalities have enacted moratoria, or outright bans, on
medicinal marijuana dispensing.
Law Enforcement Against Prohibition contends that allowing medical
marijuana dispensaries makes neighborhoods safer by bringing the
trade above ground where it can be regulated and controlled.
"California currently takes in between $58 million and $105 million
in sales taxes on medical marijuana ever year, according to the
Board of Equalization. The City of Sacramento alone takes in $1
million a year in revenue from medical marijuana dispensaries."
American Civil Liberties Union of California (ACLU) believes the bill
would better enable the State to meet the expectations of
Proposition 215 passed by Californians in 1996. ACLU argues that a
Board within the Department of Consumer Affairs would ensure that
collectives or cooperatives, as well as growers, producers
manufactures, and all the retailers, would be identified, licensed,
and regulated in a fair unbiased and uniform manner. ACLU further
argues that the bill would enact a self-sustaining funding
mechanism, requiring little or no Stat funding.
13.Arguments in Opposition. California Bankers Association is opposed
to the bill unless it is amended to remove HSC § 11362.93, which
permits a financial institution to use marijuana as collateral and
sell that collateral upon default of a financial obligation. This
provision creates confusion and conflicts with federal law relating
to the owning of illegal substances, exposing banks to federal civil
forfeiture laws without the added protection afforded to
innocent-parties.
California District Attorneys Association (CDAA) is concerned that
this measure would generally preempt all local ordinances or
regulations relating to the regulation and control of medical
marijuana. While the bill allows local jurisdictions to opt out, it
allows a new state board to govern the zoning of medical marijuana
facilities in the absence of a local ordinance. "In doing so, the
measure effectively requires that local jurisdictions allow ready
access to medical marijuana thereby mandating city or county
complicity with activity that is still illegal under federal law.
Given the controversial nature of the underlying policy, we feel
that these decisions that have wide-ranging impacts on local
communities are best made by individuals and boards elected by, and
directly accountable to, the residents most affected. As such, we
cannot abide this usurpation of local sovereignty by the state."
AB 2312
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"Additionally, we are dismayed by the provision of this measure that
prohibits state or local officials from assisting federal
authorities in enforcing marijuana laws. This provision hamstrings
peace officers and prosecutors from assisting their federal partners
and creates a dangerous precedent of non-cooperation, particularly
as it regards activity that again is still illegal under federal
law."
CalTax states : "AB 2312 could result in taxpayers paying higher
taxes, but is keyed as a majority-vote bill, in violation of
Proposition 26's two-thirds vote requirement. The state
constitution rightfully requires a higher-vote threshold on taxes
because government has more discretion on how tax revenues are
spent. Also, this bill allows local governments to impose a
transactions (sales) and use taxes beyond the two percent local rate
limitation currently authorized by existing law."
The City of Murrieta's issue with AB 2312 is that it seeks to
regulate the delivery system of a drug that is illegal by federal
standards, placing local jurisdictions in direct conflict with
federal law. "Furthermore, it appears the courts have finally
determined to hear cases involving the right of local cities to set
zoning requirements regarding dispensaries. AB 2312 trumps the
courts before they have even made their decision in the matter."
California State Sheriff's Association (CSAA) states that local law
enforcement agencies and all stat departments are grappling with
significant budget cuts over the last several years while trying to
maintain critical services. "As public safety officers, we have
seen first-hand the damage that drug abuse can cause individuals and
the community at large. This drastic shift in public policy places
California Sheriffs' and peace officers in the regrettable position
of having to choose between federal and state law."
A joint letter from numerous law enforcement associations including
the California Peace Officers Association , the California Police
Chiefs Association , and the California State Sheriffs Association
oppose the bill stating that although the bill claims to be a
regulatory bill, it's really a giant permission slip for medical
marijuana stores to operate in a virtual unfettered manner. The
joint letter makes the following arguments:
The bill exposes state employees to federal prosecution for
drug trafficking . Page 5, lines 27 through 31 create a state
board to administer California's medical marijuana law.
AB 2312
Page 31
The bill opens the door to "other business entities", whoever
they may be, to sell marijuana. Page 6, lines 32 and 33
explicitly permit "other business entities" to engage in
marijuana trafficking. Moreover, the phrase "other business
entities" clearly opens the door to for profit marijuana stores.
The bill permits the wholesale opening of marijuana stores by
"other business entities" even without regulation. AB 2312
claims that it will "create regulations pursuant to the issuance
of marijuana permits." However, page 7; lines 1 through 3 make it
very clear that marijuana sales permits must be issued regardless
of whether ANY regulations have been written.
The bill severely limits the ability of cities to control
medical marijuana dispensaries that the state will airdrop into
their communities . The bill prohibits ANY city oversight of what
is called a "medical marijuana facility" (page 8 lines 39 to 40,
and page 9, line one).
The bill permits Drug Traffickers, Human Traffickers and
persons on parole for serious or violent felonies to own and
operate marijuana stores . Take a look at page 16, lines 29 to
35. It lists crimes for which a person is ineligible to operate a
marijuana business. The crimes that are NOT listed: Drug
Trafficking, Human Trafficking, any serious or violent felony
that is more than five years old, and just about anyone who is
currently incarcerated.
The Board of Medical Marijuana Enforcement is rigged in favor
of the marijuana industry . Page 11, lines 10 through 27 provide
for a nine member "enforcement board". The composition of the
board is manipulated so that at least five members will always be
supporters of increased marijuana sales.
If the Board takes no action on an application within 180 days
of it being sent, the application to run the marijuana store, or
the marijuana facility is deemed automatically approved . Page 17,
lines 13 through 17 of the bill create this automatic approval
mechanism. In other words, if the marijuana industry stacked
board does nothing, another marijuana store is automatically
approved.
The League of California Cities states that its most immediate
concern is that the California Supreme Court is now reviewing three
cases regarding permissibility of regulating medical marijuana as it
relates to local, state, and federal law. The League recommends
waiting until the court rulings to determine how to go forward with
a bill such as this.
NOTE : Double-referral to Rules Committee, second.
AB 2312
Page 32
SUPPORT AND OPPOSITION:
Support:
American Civil Liberties Union of California
American Federation of State, County and Municipal Employees AFL-CIO
California Communities United Institute
Drug Policy Alliance
Law Enforcement Against Prohibition
Legal Services for Prisoners with Children
Marijuana Policy Project
United Food & Commercial Workers Western States Council
Numerous individuals
California Labor Federation
Opposition:
Association for Los Angeles Deputy Sheriffs
Association of Orange County Deputy Sheriffs
California Bankers Association
California District Attorneys Association
California Fraternal Order of Police
California Narcotic Officers Association
California Peace Officers Association
California Police Chiefs Association
California State Sheriffs Association
CalTax
Citrus Heights Police Department, Chief of Police, Christopher Boyd
City of Antioch
City of Camarillo
City of Canyon Lake
City of Cathedral City
City of Citrus Heights
City of Corning
City of Culver City
City of Downey
City of Eastville
City of Encinitas
City of Hemet
City of Highland
City of Lake Forest
City of Lathrop, Councilmember, Omar Ornelas
City of Lathrop, Vice Mayor, Christopher Mateo
City of Lemoore
City of Lodi
AB 2312
Page 33
City of Martinez
City of Murrieta
City of Ontario
City of Palmdale
City of Port Hueneme
City of Poway
City of Rancho Cucamonga
City of Redlands Police Department
City of San Joaquin
City of San Luis Obispo
City of Susanville
City of Thousand Oaks
City of Upland
City of Visalia
City of Vista
Coalition for a Drug Free California
International Faith Based Coalition
League of California Cities
Long Beach Police Officers Association
Los Angeles County District Attorney's Office
Los Angeles County Professional Peace Officers Association
Los Angeles Division of the League of California Cities
Los Angeles Police Protective League
Mendocino County Board of Supervisors
Mendocino Medical Marijuana Advisory Board
Redwood City, Mayor, Alicia Aguirre
Riverside Sheriffs Association
Sacramento County Board of Supervisors
Sacramento County Deputy Sheriffs Association
Santa Ana Police Officers Association
Tulare County Board of Supervisors
Numerous individuals
Consultant:G. V. Ayers