BILL NUMBER: AB 473	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 15, 2013
	AMENDED IN ASSEMBLY  MARCH 19, 2013

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 medical
 cannabis   marijuana, and making an
appropriation therefor  .



	LEGISLATIVE COUNSEL'S DIGEST


   AB 473, as amended, Ammiano. Medical  cannabis: 
 marijuana:  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 Medical  Cannabis
  Marijuana  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 medical  cannabis
  marijuana  and medical  cannabis
  marijuana  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
medical  cannabis   marijuana  businesses
and establish a  licensing structure   mandatory
commercial registration program  , as specified, which would
include an identification card program.  The 
    This 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. The 
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 medical  cannabis
  marijuana  and to take appropriate action against
businesses and individuals who fail to comply with the law.  The
bill would specify that its provisions are severable.  
    The bill would make certain violations of its provisions a crime,
thereby imposing a state-mandated local program.  
   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.  
   This bill would provide that no reimbursement is required by this
act for a specified reason. 
   Vote: majority. Appropriation:  no   yes
 . Fiscal committee: yes. State-mandated local program: 
no   yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Chapter 18 (commencing with Section 26000) is added to
Division 9 of the Business and Professions Code, to read:
      CHAPTER 18.  MEDICAL  CANNABIS   MARIJUANA
 REGULATION



      Article 1.  General Provisions


   26000.  It is the intent of the Legislature in enacting this
chapter to provide for the comprehensive regulation of the
cultivation, manufacturing, testing, transportation, distribution,
and sale of medical cannabis and the enforcement of laws relating to
these activities.
   26002.  For the purpose of this chapter:
   (a) "Division" means the Division of Medical  Cannabis
  Marijuana  Regulation and Enforcement.
   (b) "Identification program" means the universal identification
card program for  qualified patients and persons engaged in
business operations related to medical cannabis  
mandatory commercial restraints  . 
   (c) "Mandatory commercial registrant" means 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, or any employee thereof,
that operates any facility, building, structure, or location where
medical marijuana is grown, possessed, stored, manufactured, tested,
or sold, other than a location or building in which a patient or a
patient's primary caregiver, as defined by the Compassionate Use Act
of 1996, is growing medical marijuana exclusively for patient medical
use and not for sale.  
   (d) "Testing and labeling" means mandatory labeling and a quality
assurance plan in place that address all of the following:  

   (1) Dosage.  
   (2) Microbiological contaminants, including, but not limited to,
all of the following:  
   (A) Pesticides.  
   (B) Herbicides.  
   (C) Pathogens.  
   (D) Molds.  
   (E) Fungi.  
   (3) Random sample testing.  
   (4) Handling, care, and storage.  
   (5) Date and location of production and manufacturing.  
   (e) "Fund" means the Medical Marijuana Fund established pursuant
to Section 26028. 

      Article 2.  Administration


   26020.   (a)    There is hereby created in the
Department of Alcoholic Beverage Control the Division of Medical
 Cannabis   Marijuana  Regulation and
Enforcement. The division shall be administered by a chief executive
to be appointed by the director. 
   (b) The chief executive shall be the appointing authority of all
employees within the division. All heads of subdivisions or advisory
committees within the division shall be responsible to the chief
executive for the proper carrying out of the duties and
responsibilities of their respective positions. 
   26022.  The division shall have all power necessary for
administration of this chapter, including, but not limited to, the
following:
   (a) Establishing statewide standards for the cultivation,
manufacturing, testing, transportation, distribution, and sales of
medical  cannabis   marijuana  and medical
 cannabis   marijuana  products.
   (b) Establishing a scale of fees, to be imposed by the state, for
the cultivation, manufacturing, testing, transportation,
distribution, and sale of medical  cannabis  
marijuana  and medical  cannabis  
marijuana  products.  The division may charge separate fees
for each mandatory commercial registration application for
cultivation, manufacturing, transportation, distribution, and sales.
The total fees imposed pursuant to this chapter shall not exceed the
total costs of   administering this chapter. 
   (c) Adopting, amending, and rescinding reasonable regulations,
special rulings, and findings as necessary for the regulation and
control of the cultivation, manufacturing, testing, transportation,
distribution, and sale of medical  cannabis  
marijuana  and to govern the procedures of the division to
exercise the powers and perform the duties conferred upon it by this
chapter, in accordance with the provisions of Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code. 
   (d) Approving or denying mandatory registration applications for
cultivation, manufacturing, testing and labeling, transportation,
distribution, and sale of medical marijuana pursuant to this chapter.
 
   (e) Suspending, fining, restricting, or revoking mandatory
commercial registration upon a violation of this chapter or a rule or
regulation adopted pursuant to this chapter.  
   (f) Imposing any penalty authorized by this chapter or any rule or
regulation adopted pursuant to this chapter.  
   (g) Taking any reasonable action with respect to a mandatory
commercial registration application in accordance with procedures
established pursuant to this chapter.  
   (h) Hearing and determining, at a public hearing, any appeals of
mandatory commercial registration application denial or renewal
application denial and any complaints against a mandatory commercial
registrant.  
   (i) Administering oaths and issuing subpoenas to require the
presence of individuals and the production of papers, books, and
records necessary to the determination of any hearing. Any hearing
pursuant to this section shall be conducted in accordance with
Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of
Title 2 of the Government Code.  
   (j) Maintaining the confidentiality of any information obtained
from a mandatory commercial registrant related to the medical
marijuana patients or caregivers in strict compliance with the
federal Health Insurance Portability and Accountability Act (42
U.S.C. Sec. 1320d et seq.), the Confidentiality of Medical
Information Act (Part 2.6 (commencing with Section 56) of Division 1
of the Civil Code), and the Insurance Information Privacy Protection
Act (Article 6.6 (commencing with Section 79) of Chapter 1 of Part 2
of Division 1 of the Insurance Code).  
   (k) Developing any forms, identification cards, and applications
that are necessary or convenient in the reasonable discretion of the
division for the administration of this chapter or any of the rules
or regulations adopted pursuant to this chapter.  
   (l) Overseeing the operation of the Medical Marijuana Fund
established pursuant to Section 26028.  
   (m) Establishing reasonable fees for processing all applications,
registrations, notices, or reports required to be submitted to the
division. The amount of the fees shall reflect, but shall not exceed,
the direct and indirect costs of the division for the administration
of this chapter and the rules or regulations adopted pursuant to
this chapter. 
   26024.  The division shall assist in the development of uniform
policies for the taxation of medical  cannabis  
marijuana  businesses.
   26026.  The division shall identify successful regulatory
structures for the purpose of supporting cities and counties in
appropriately governing activities related to medical 
cannabis   marijuana  . 
   26028.  (a) The Medical Marijuana Fund is hereby established
within the State Treasury. Notwithstanding Section 16305.7 of the
Government Code, the fund shall include any interest and dividends
earned on the money in the fund.
   (b) All fees collected pursuant to this chapter shall be deposited
into the Medical Marijuana Fees Account, which is hereby established
within the fund. Notwithstanding Section 13340 of the Government
Code, all moneys within the Medical Marijuana Fees Account are hereby
continuously appropriated, without regard to fiscal year, to the
division solely for the purposes of fully funding and administering
this chapter, including, but not limited to, the costs incurred by
the Department of Alcoholic Beverage Control for its administrative
expenses incurred on behalf of the division. From moneys in the
account, the division shall reimburse the department for those costs.

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

      Article 3.   Licensing   Mandatory
Commercial Registration 


   26040.   The   (a)     By
July 1, 2014, the  division shall establish a  licensing
  mandatory commercial registration  program and a
fee structure for cultivation, manufacturing, testing,
transportation, distribution, and sale of medical  cannabis
  marijuana  and medical  cannabis
  marijuana  products  , and shall make
available mandatory commercial registration forms  . 
   (b) A mandatory commercial registration application or renewal
shall be approved unless the division determines any of the
following: 
    (1)     The applicant fails to meet the
requirements of this chapter or any regulation adopted pursuant to
this chapter.  
   (2) The applicant, or any of its officers or directors, is under
21 years of age.  
   (3) The applicant has knowingly answered a question or request for
information falsely on the application form. 
   (4) The applicant, or any of its officers or directors, has been
convicted in the previous five years of a violent felony, as
specified in subdivision (c) of Section 667.5 of the Penal Code, a
serious felony as specified in subdivision (c) of Section 1192.7 of
the Penal Code, a felony offense involving fraud or deceit, or any
other felony that, in the division's estimation, would impair the
applicant's ability to appropriately operate medical marijuana
cultivation, manufacturing, testing, distribution, or sales. 

   (5) The applicant is a licensed physician making patient
recommendations for medical marijuana. 
   (6) The applicant, or any of its officers or directors, has been
sanctioned by the division for operating unregistered commercial
medical marijuana activities, or has had a mandatory commercial
registration revoked in the previous three years.  
   26042.  The licensing program described in Section 24040 shall
include an identification card program that respects the protections
of the Confidentiality of Medical Information Act (Part 2.6
(commencing with Section 56) of Division 1 of the Civil Code) and the
federal Health Insurance Portability and Accountability Act of 1996
(42 U.S.C. Sec. 1320d et seq.).  
   26041.  For the purpose of regulating the cultivation,
manufacturing, testing, transportation, distribution, and sale of
medical marijuana, the division, in its reasonable discretion, may
establish various classes or types of registration, including
distinguishing between operators and employees, for specific medical
marijuana-related activities, as set forth in this chapter. 

   26043.  Each mandatory commercial registration application
approved by the division pursuant to this chapter is separate and
distinct. An applicant may apply for mandatory commercial
registration in more than one class of specified medical marijuana
activities.  
   26044.  A mandatory commercial registration application approved
by the division pursuant to this chapter shall be valid for a period
not to exceed two years from the date of approval unless revoked or
suspended pursuant to this chapter or the rules or regulations
adopted pursuant to this chapter.  
   26045.  Ninety days prior to the expiration date of an existing
mandatory commercial registration, the division shall notify the
registrant of the expiration date by first-class mail at the person's
address of record with the division. A registrant shall apply for
the renewal of an existing mandatory commercial registration to the
division not less than 60 days prior to the expiration. The division,
in its discretion and based upon reasonable grounds, may waive the
60-day time requirement set forth in this section. The division shall
act upon a timely filed mandatory commercial registration renewal
application within 10 days prior to the expiration of the
registration.  
   26046.  An application for mandatory commercial registration shall
include, but shall not be limited to, all of the following:
   (a) A plan for conformance with testing.
   (b) A plan to address security for premises where marijuana
cultivation, manufacturing, testing, distribution, or sales will
occur.
   (c) A plan for conformance with local zoning requirements.
   (d) Protocols to prevent unlawful diversion of marijuana. 

   26047.  The division shall approve, and contract with, one or more
laboratories that can document compliance with industry best
practices to provide plan-consulting services and to conduct
laboratory and testing services to determine compliance with the
requirements set forth in subdivision (d) of Section 26002. 

   26048.  The division shall approve cultivation registration only
in conjunction with the city, county, or city and county land use
authority in which the cultivation occurs, where the city, county, or
city and county addresses compliance with relevant state and federal
environmental impact laws and regulations, including, but not
limited to, all of the following:
   (a) Clear-cutting.
   (b) Road building.
   (c) Water diversion.
   (d) Use of chemicals.  
   26049.  All mandatory commercial registrants are exempt from
arrest, prosecution, or sanctions under Sections 11357, 11358, 11359,
11360, 11366, 11366.5, 11379.6, and 11570 of the Health and Safety
Code, unless they do not possess a valid registration under this
chapter or the conduct in question is not within the scope of the
registration.  
   26050.  (a) This chapter shall not apply to, and shall have no
diminishing effect on, the rights and protections granted to
individual patients and primary caregivers pursuant to the
Compassionate Use Act of 1996.
   (b) Individual patients and caregivers cultivating marijuana at
their private residences exclusively for patient medical use who do
not sell or charge for the cultivation of marijuana are not
considered commercial registrants, and are exempt from mandatory
commercial registration.  
   26051.  A facility, building, structure, or location operating in
conformance with local zoning requirements as of the effective date
of this chapter may continue its operations until such time as its
application for mandatory commercial registration has been approved
or denied under this chapter. 

      Article 4.  Enforcement


   26060.   (a)    The division shall work in
conjunction with law enforcement entities throughout the state for
the purpose of implementing and enforcing the rules and regulations
regarding medical  cannabis   marijuana 
and taking appropriate action against businesses and individuals who
fail to comply with the law. 
   (b) Nothing in this chapter shall prevent a city, county, or city
and county from enforcing a zoning ordinance or law of general
application.  
   26062.  Commencing January 1, 2015, no person, except for
mandatory commercial registrants, shall offer for sale any product
containing marijuana, or operate any facility, building, structure,
or location where medical marijuana is grown, processed, stored,
manufactured, tested, or sold, other than a location or building in
which a patient or a patient's primary caregiver, as defined by the
Compassionate Use Act of 1996, is growing medical marijuana
exclusively for patient medical use and not for sale.  
   26063.  (a) Commencing January 1, 2015, any product containing
marijuana that is offered for sale shall be subject to the testing
and labeling requirements set forth in subdivision (d) of Section
26002.
   (b) No person shall steal or fraudulently use any mandatory
commercial registrant's identification card or registration status to
acquire, possess, cultivate, transport, use, produce, or distribute
marijuana.
   (c) No person shall counterfeit, tamper with, or fraudulently
produce an identification card or registration status.
   (d) Any person who violates this section, or Section 26062, is
guilty of a misdemeanor and shall be subject to the following
penalties:
   (1) For the first offense, imprisonment in the county jail for no
more than six months or a fine not to exceed one thousand dollars
($1,000), or both.
   (2) For a second or subsequent offense, imprisonment in the county
jail for no more than one year or a fine not to exceed one thousand
dollars ($1,000), or both. 
   26064.  Any person operating an unregistered commercial medical
marijuana facility, building, structure, or location may be subject
to civil penalties of up to twenty-five thousand dollars ($25,000),
and the division may order the destruction of any marijuana being
cultivated, manufactured, or possessed in violation of this chapter.
Any civil fines collected pursuant to this section shall be deposited
into the Medical Marijuana Penalties Account within the fund. 

   26065.  No funds shall be spent by state or local officials to
assist federal authorities in enforcing federal marijuana
prohibitions with regard to activities carried out by mandatory
commercial registrants in compliance with the provisions of this
chapter. Nothing in this chapter shall be construed to limit a law
enforcement agency's ability to investigate unlawful activity in
relation to a mandatory commercial registrant. 
   SEC. 2   .    The provisions of this act are
severable. If any provision of this act or its application is held
invalid, that invalidity shall not affect other provisions or
applications that can be given effect without the invalid provision
or application. 
   SEC. 3   .    No reimbursement is required
by this act pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.