Amended in Assembly April 15, 2013

Amended in Assembly March 19, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 473


Introduced by Assembly Member Ammiano

February 19, 2013


An act to add Chapter 18 (commencing with Section 26000) to Division 9 of the Business and Professions Code, relating to medicalbegin delete end deletebegin deletecannabisend deletebegin insert marijuana, and making an appropriation thereforend insert.

LEGISLATIVE COUNSEL’S DIGEST

AB 473, as amended, Ammiano. Medicalbegin delete cannabis:end deletebegin insert marijuana:end insert state regulation and enforcement.

Existing law, the Compassionate Use Act of 1996, an initiative measure enacted by the approval of Proposition 215 at the November 6, 1996, statewide general election, authorizes the use of marijuana for medical purposes. Existing law enacted by the Legislature requires the establishment of a program for the issuance of identification cards to qualified patients so that they may lawfully use marijuana for medical purposes, and requires the establishment of guidelines for the lawful cultivation of marijuana grown for medical use.

This bill would create the Division of Medicalbegin delete Cannabisend deletebegin insert Marijuanaend insert Regulation and Enforcement within the Department of Alcoholic Beverage Control. The bill would grant the division all power necessary to, among other things, establish statewide standards for the cultivation, manufacturing, testing, transportation, distribution, and sales of medicalbegin delete cannabisend deletebegin insert marijuanaend insert and medicalbegin delete cannabisend deletebegin insert marijuanaend insert products and a statewide fee scale in relation to these activities. The bill would require the division to assist in the development of uniform policies for the taxation of medicalbegin delete cannabisend deletebegin insert marijuanaend insert businesses and establish abegin delete licensing structureend deletebegin insert mandatory commercial registration programend insert, as specified, which would include an identification card program.begin delete Theend delete

begin insertThis bill would authorize the division to assess penalties for violation of these provisions. The bill would establish the Medical Marijuana Fund and would require deposit of fees and penalties into distinct accounts within the fund. The bill would continuously appropriate moneys within the fees account to the division for the purposes of administering the program. Theend insert bill would require the division to work in conjunction with law enforcement entities throughout the state to implement and enforce the rules and regulations regarding medicalbegin delete cannabisend deletebegin insert marijuanaend insert and to take appropriate action against businesses and individuals who fail to comply with the law.begin insert The bill would specify that its provisions are severable.end insert

begin insert

The bill would make certain violations of its provisions a crime, thereby imposing a state-mandated local program.

end insert
begin insert

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert
begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert

Vote: majority. Appropriation: begin deleteno end deletebegin insertyesend insert. Fiscal committee: yes. State-mandated local program: begin deleteno end deletebegin insertyesend insert.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Chapter 18 (commencing with Section 26000)
2is added to Division 9 of the Business and Professions Code, to
3read:

4 

5Chapter  18. Medicalbegin delete Cannabisend deletebegin insert Marijuanaend insert Regulation
6

6 

7Article 1.  General Provisions
8

 

9

26000.  

It is the intent of the Legislature in enacting this chapter
10to provide for the comprehensive regulation of the cultivation,
11manufacturing, testing, transportation, distribution, and sale of
P3    1medical cannabis and the enforcement of laws relating to these
2activities.

3

26002.  

For the purpose of this chapter:

4(a) “Division” means the Division of Medicalbegin delete Cannabisend delete
5begin insert Marijuana end insert Regulation and Enforcement.

6(b) “Identification program” means the universal identification
7card program for begin deletequalified patients and persons engaged in business
8operations related to medical cannabisend delete
begin insert mandatory commercial
9restraintsend insert
.

begin insert

10(c) “Mandatory commercial registrant” means any individual,
11partnership, joint venture, association, limited liability company,
12corporation, estate, trust, receiver, syndicate, or any other group
13or combination thereof acting as a unit, or any employee thereof,
14that operates any facility, building, structure, or location where
15medical marijuana is grown, possessed, stored, manufactured,
16tested, or sold, other than a location or building in which a patient
17or a patient’s primary caregiver, as defined by the Compassionate
18Use Act of 1996, is growing medical marijuana exclusively for
19patient medical use and not for sale.

end insert
begin insert

20(d) “Testing and labeling” means mandatory labeling and a
21quality assurance plan in place that address all of the following:

end insert
begin insert

22(1) Dosage.

end insert
begin insert

23(2) Microbiological contaminants, including, but not limited
24to, all of the following:

end insert
begin insert

25(A) Pesticides.

end insert
begin insert

26(B) Herbicides.

end insert
begin insert

27(C) Pathogens.

end insert
begin insert

28(D) Molds.

end insert
begin insert

29(E) Fungi.

end insert
begin insert

30(3) Random sample testing.

end insert
begin insert

31(4) Handling, care, and storage.

end insert
begin insert

32(5) Date and location of production and manufacturing.

end insert
begin insert

33(e) “Fund” means the Medical Marijuana Fund established
34pursuant to Section 26028.

end insert

35 

36Article 2.  Administration
37

 

38

26020.  

begin insert(a)end insertbegin insertend insert There is hereby created in the Department of
39Alcoholic Beverage Control the Division of Medicalbegin delete Cannabisend delete
P4    1begin insert Marijuanaend insert Regulation and Enforcement. The division shall be
2administered by a chief executive to be appointed by the director.

begin insert

3(b) The chief executive shall be the appointing authority of all
4employees within the division. All heads of subdivisions or advisory
5committees within the division shall be responsible to the chief
6executive for the proper carrying out of the duties and
7responsibilities of their respective positions.

end insert
8

26022.  

The division shall have all power necessary for
9administration of this chapter, including, but not limited to, the
10following:

11(a) Establishing statewide standards for the cultivation,
12manufacturing, testing, transportation, distribution, and sales of
13medicalbegin delete cannabisend deletebegin insert marijuanaend insert and medicalbegin delete cannabisend deletebegin insert marijuanaend insert
14 products.

15(b) Establishing a scale of fees, to be imposed by the state, for
16the cultivation, manufacturing, testing, transportation, distribution,
17and sale of medicalbegin delete cannabisend deletebegin insert marijuanaend insert and medicalbegin delete cannabisend delete
18begin insert marijuanaend insert products. begin insertThe division may charge separate fees for
19each mandatory commercial registration application for
20cultivation, manufacturing, transportation, distribution, and sales.
21The total fees imposed pursuant to this chapter shall not exceed
22the total costs of administering this chapter.end insert

23(c) Adopting, amending, and rescinding reasonable regulations,
24special rulings, and findings as necessary for the regulation and
25control of the cultivation, manufacturing, testing, transportation,
26distribution, and sale of medicalbegin delete cannabisend deletebegin insert marijuanaend insert and to govern
27the procedures of the division to exercise the powers and perform
28the duties conferred upon it by this chapter, in accordance with
29the provisions of Chapter 3.5 (commencing with Section 11340)
30of Part 1 of Division 3 of Title 2 of the Government Code.

begin insert

31(d) Approving or denying mandatory registration applications
32for cultivation, manufacturing, testing and labeling, transportation,
33distribution, and sale of medical marijuana pursuant to this
34chapter.

end insert
begin insert

35(e) Suspending, fining, restricting, or revoking mandatory
36commercial registration upon a violation of this chapter or a rule
37or regulation adopted pursuant to this chapter.

end insert
begin insert

38(f) Imposing any penalty authorized by this chapter or any rule
39or regulation adopted pursuant to this chapter.

end insert
begin insert

P5    1(g) Taking any reasonable action with respect to a mandatory
2commercial registration application in accordance with procedures
3established pursuant to this chapter.

end insert
begin insert

4(h) Hearing and determining, at a public hearing, any appeals
5of mandatory commercial registration application denial or
6renewal application denial and any complaints against a
7mandatory commercial registrant.

end insert
begin insert

8(i) Administering oaths and issuing subpoenas to require the
9presence of individuals and the production of papers, books, and
10records necessary to the determination of any hearing. Any hearing
11pursuant to this section shall be conducted in accordance with
12Chapter 5 (commencing with Section 11500) of Part 1 of Division
133 of Title 2 of the Government Code.

end insert
begin insert

14(j) Maintaining the confidentiality of any information obtained
15from a mandatory commercial registrant related to the medical
16marijuana patients or caregivers in strict compliance with the
17federal Health Insurance Portability and Accountability Act (42
18U.S.C. Sec. 1320d et seq.), the Confidentiality of Medical
19Information Act (Part 2.6 (commencing with Section 56) of Division
201 of the Civil Code), and the Insurance Information Privacy
21Protection Act (Article 6.6 (commencing with Section 79) of
22Chapter 1 of Part 2 of Division 1 of the Insurance Code).

end insert
begin insert

23(k) Developing any forms, identification cards, and applications
24that are necessary or convenient in the reasonable discretion of
25the division for the administration of this chapter or any of the
26rules or regulations adopted pursuant to this chapter.

end insert
begin insert

27(l) Overseeing the operation of the Medical Marijuana Fund
28established pursuant to Section 26028.

end insert
begin insert

29(m) Establishing reasonable fees for processing all applications,
30registrations, notices, or reports required to be submitted to the
31division. The amount of the fees shall reflect, but shall not exceed,
32the direct and indirect costs of the division for the administration
33of this chapter and the rules or regulations adopted pursuant to
34this chapter.

end insert
35

26024.  

The division shall assist in the development of uniform
36policies for the taxation of medicalbegin delete cannabisend deletebegin insert marijuanaend insert businesses.

37

26026.  

The division shall identify successful regulatory
38structures for the purpose of supporting cities and counties in
39appropriately governing activities related to medicalbegin delete cannabisend delete
40begin insert marijuanaend insert.

begin insert
P6    1

begin insert26028.end insert  

(a) The Medical Marijuana Fund is hereby established
2within the State Treasury. Notwithstanding Section 16305.7 of the
3Government Code, the fund shall include any interest and dividends
4earned on the money in the fund.

5(b) All fees collected pursuant to this chapter shall be deposited
6into the Medical Marijuana Fees Account, which is hereby
7established within the fund. Notwithstanding Section 13340 of the
8Government Code, all moneys within the Medical Marijuana Fees
9Account are hereby continuously appropriated, without regard to
10fiscal year, to the division solely for the purposes of fully funding
11and administering this chapter, including, but not limited to, the
12costs incurred by the Department of Alcoholic Beverage Control
13for its administrative expenses incurred on behalf of the division.
14From moneys in the account, the division shall reimburse the
15department for those costs.

16(c) All penalties collected pursuant to this chapter shall be
17deposited into the Medical Marijuana Penalties Account, which
18is hereby established within the fund. All moneys within the
19Medical Marijuana Penalties Account shall be available for the
20purposes of this chapter, upon appropriation by the Legislature.

end insert

21 

22Article 3.  begin deleteLicensing end deletebegin insertMandatory Commercial Registrationend insert
23

 

24

26040.  

begin deleteThe end deletebegin insert(a)end insertbegin insertend insertbegin insertBy July 1, 2014, the end insertdivision shall establish a
25begin delete licensingend deletebegin insert mandatory commercial registrationend insert program and a fee
26structure for cultivation, manufacturing, testing, transportation,
27distribution, and sale of medicalbegin delete cannabisend deletebegin insert marijuanaend insert and medical
28begin delete cannabisend deletebegin insert marijuana end insert productsbegin insert, and shall make available mandatory
29commercial registration formsend insert
.

begin insert

30(b) A mandatory commercial registration application or renewal
31shall be approved unless the division determines any of the
32following:

end insert

33begin insert(1)end insertbegin insertend insertbegin insertThe applicant fails to meet the requirements of this chapter
34or any regulation adopted pursuant to this chapter.end insert

begin insert

35(2) The applicant, or any of its officers or directors, is under
3621 years of age.

end insert
begin insert

37(3) The applicant has knowingly answered a question or request
38for information falsely on the application form.

end insert
begin insert

39(4) The applicant, or any of its officers or directors, has been
40convicted in the previous five years of a violent felony, as specified
P7    1in subdivision (c) of Section 667.5 of the Penal Code, a serious
2felony as specified in subdivision (c) of Section 1192.7 of the Penal
3Code, a felony offense involving fraud or deceit, or any other felony
4that, in the division’s estimation, would impair the applicant’s
5ability to appropriately operate medical marijuana cultivation,
6manufacturing, testing, distribution, or sales.

end insert
begin insert

7(5) The applicant is a licensed physician making patient
8recommendations for medical marijuana.

end insert
begin insert

9(6) The applicant, or any of its officers or directors, has been
10sanctioned by the division for operating unregistered commercial
11medical marijuana activities, or has had a mandatory commercial
12registration revoked in the previous three years.

end insert
begin delete
13

26042.  

The licensing program described in Section 24040 shall
14include an identification card program that respects the protections
15of the Confidentiality of Medical Information Act (Part 2.6
16(commencing with Section 56) of Division 1 of the Civil Code)
17and the federal Health Insurance Portability and Accountability
18Act of 1996 (42 U.S.C. Sec. 1320d et seq.).

end delete
begin insert
19

begin insert26041.end insert  

For the purpose of regulating the cultivation,
20manufacturing, testing, transportation, distribution, and sale of
21medical marijuana, the division, in its reasonable discretion, may
22establish various classes or types of registration, including
23distinguishing between operators and employees, for specific
24medical marijuana-related activities, as set forth in this chapter.

end insert
begin insert
25

begin insert26043.end insert  

Each mandatory commercial registration application
26approved by the division pursuant to this chapter is separate and
27distinct. An applicant may apply for mandatory commercial
28registration in more than one class of specified medical marijuana
29activities.

end insert
begin insert
30

begin insert26044.end insert  

A mandatory commercial registration application
31approved by the division pursuant to this chapter shall be valid
32for a period not to exceed two years from the date of approval
33unless revoked or suspended pursuant to this chapter or the rules
34or regulations adopted pursuant to this chapter.

end insert
begin insert
35

begin insert26045.end insert  

Ninety days prior to the expiration date of an existing
36mandatory commercial registration, the division shall notify the
37registrant of the expiration date by first-class mail at the person’s
38address of record with the division. A registrant shall apply for
39the renewal of an existing mandatory commercial registration to
40the division not less than 60 days prior to the expiration. The
P8    1division, in its discretion and based upon reasonable grounds,
2may waive the 60-day time requirement set forth in this section.
3The division shall act upon a timely filed mandatory commercial
4registration renewal application within 10 days prior to the
5expiration of the registration.

end insert
begin insert
6

begin insert26046.end insert  

An application for mandatory commercial registration
7shall include, but shall not be limited to, all of the following:

8(a) A plan for conformance with testing.

9(b) A plan to address security for premises where marijuana
10cultivation, manufacturing, testing, distribution, or sales will occur.

11(c) A plan for conformance with local zoning requirements.

12(d) Protocols to prevent unlawful diversion of marijuana.

end insert
begin insert
13

begin insert26047.end insert  

The division shall approve, and contract with, one or
14more laboratories that can document compliance with industry
15best practices to provide plan-consulting services and to conduct
16laboratory and testing services to determine compliance with the
17requirements set forth in subdivision (d) of Section 26002.

end insert
begin insert
18

begin insert26048.end insert  

The division shall approve cultivation registration only
19in conjunction with the city, county, or city and county land use
20authority in which the cultivation occurs, where the city, county,
21or city and county addresses compliance with relevant state and
22federal environmental impact laws and regulations, including, but
23not limited to, all of the following:

24(a) Clear-cutting.

25(b) Road building.

26(c) Water diversion.

27(d) Use of chemicals.

end insert
begin insert
28

begin insert26049.end insert  

All mandatory commercial registrants are exempt from
29arrest, prosecution, or sanctions under Sections 11357, 11358,
3011359, 11360, 11366, 11366.5, 11379.6, and 11570 of the Health
31and Safety Code, unless they do not possess a valid registration
32under this chapter or the conduct in question is not within the
33scope of the registration.

end insert
begin insert
34

begin insert26050.end insert  

(a) This chapter shall not apply to, and shall have no
35diminishing effect on, the rights and protections granted to
36individual patients and primary caregivers pursuant to the
37Compassionate Use Act of 1996.

38(b) Individual patients and caregivers cultivating marijuana at
39their private residences exclusively for patient medical use who
40do not sell or charge for the cultivation of marijuana are not
P9    1considered commercial registrants, and are exempt from
2mandatory commercial registration.

end insert
begin insert
3

begin insert26051.end insert  

A facility, building, structure, or location operating in
4conformance with local zoning requirements as of the effective
5date of this chapter may continue its operations until such time as
6its application for mandatory commercial registration has been
7approved or denied under this chapter.

end insert

8 

9Article 4.  Enforcement
10

 

11

26060.  

begin insert(a)end insertbegin insertend insert The division shall work in conjunction with law
12enforcement entities throughout the state for the purpose of
13implementing and enforcing the rules and regulations regarding
14medicalbegin delete cannabisend deletebegin insert marijuanaend insert and taking appropriate action against
15businesses and individuals who fail to comply with the law.

begin insert

16(b) Nothing in this chapter shall prevent a city, county, or city
17and county from enforcing a zoning ordinance or law of general
18application.

end insert
begin insert
19

begin insert26062.end insert  

Commencing January 1, 2015, no person, except for
20mandatory commercial registrants, shall offer for sale any product
21containing marijuana, or operate any facility, building, structure,
22or location where medical marijuana is grown, processed, stored,
23manufactured, tested, or sold, other than a location or building in
24which a patient or a patient’s primary caregiver, as defined by the
25Compassionate Use Act of 1996, is growing medical marijuana
26exclusively for patient medical use and not for sale.

end insert
begin insert
27

begin insert26063.end insert  

(a) Commencing January 1, 2015, any product
28containing marijuana that is offered for sale shall be subject to
29the testing and labeling requirements set forth in subdivision (d)
30of Section 26002.

31(b) No person shall steal or fraudulently use any mandatory
32commercial registrant’s identification card or registration status
33to acquire, possess, cultivate, transport, use, produce, or distribute
34marijuana.

35(c) No person shall counterfeit, tamper with, or fraudulently
36produce an identification card or registration status.

37(d) Any person who violates this section, or Section 26062, is
38guilty of a misdemeanor and shall be subject to the following
39penalties:

P10   1(1) For the first offense, imprisonment in the county jail for no
2more than six months or a fine not to exceed one thousand dollars
3($1,000), or both.

4(2) For a second or subsequent offense, imprisonment in the
5county jail for no more than one year or a fine not to exceed one
6thousand dollars ($1,000), or both.

end insert
begin insert
7

begin insert26064.end insert  

Any person operating an unregistered commercial
8medical marijuana facility, building, structure, or location may
9be subject to civil penalties of up to twenty-five thousand dollars
10($25,000), and the division may order the destruction of any
11marijuana being cultivated, manufactured, or possessed in
12violation of this chapter. Any civil fines collected pursuant to this
13section shall be deposited into the Medical Marijuana Penalties
14Account within the fund.

end insert
begin insert
15

begin insert26065.end insert  

No funds shall be spent by state or local officials to
16assist federal authorities in enforcing federal marijuana
17prohibitions with regard to activities carried out by mandatory
18commercial registrants in compliance with the provisions of this
19chapter. Nothing in this chapter shall be construed to limit a law
20enforcement agency’s ability to investigate unlawful activity in
21relation to a mandatory commercial registrant.

end insert
22begin insert

begin insertSEC. 2end insertbegin insert.end insert  

end insert
begin insert

The provisions of this act are severable. If any
23provision of this act or its application is held invalid, that invalidity
24shall not affect other provisions or applications that can be given
25effect without the invalid provision or application.

end insert
26begin insert

begin insertSEC. 3end insertbegin insert.end insert  

end insert
begin insert

No reimbursement is required by this act pursuant to
27Section 6 of Article XIII B of the California Constitution because
28the only costs that may be incurred by a local agency or school
29district will be incurred because this act creates a new crime or
30infraction, eliminates a crime or infraction, or changes the penalty
31for a crime or infraction, within the meaning of Section 17556 of
32the Government Code, or changes the definition of a crime within
33the meaning of Section 6 of Article XIII B of the California
34Constitution.

end insert


O

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