Amended in Assembly May 24, 2013

Amended in Assembly April 15, 2013

Amended in Assembly March 19, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 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 medical marijuana, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

AB 473, as amended, Ammiano. Medical 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 begin insert enact the Medical Marijuana Regulation and Control Act and would end insert create the Division of Medical 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 marijuana and medical 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 marijuana businesses and establish a mandatory commercial registration program, as specified, which would include an identification card program.

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 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. begin insert The bill would make related findings and declarations. end insert

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: yes. Fiscal committee: yes. State-mandated local program: yes.

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert This act shall be known, and may be cited, as the
Medical Marijuana Regulation and Control Act. end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert (a) end insert begin insert   end insert begin insert The Legislature finds and declares all of the
following: end insert

begin insert

(1) In 1996, the people of the State of California enacted the
Compassionate Use Act of 1996, codified in Section 11362.5 of
the Health and Safety Code. The people of the State of California
declared that their purpose in enacting the measure was, among
other things, “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.”

end insert begin insert

(2) The Compassionate Use Act of 1996 called on state
government to implement a plan for the safe and affordable
distribution of marijuana to all patients in medical need of
marijuana.

end insert begin insert

(3) In 2003, the Legislature enacted the Medical Marijuana
Program Act (MMPA), codified in Article 2.5 (commencing with
Section 11362.7) of Chapter 6 of Division 10 of the Health and
Safety Code. Under the guidance of the MMPA, approximately 60
California cities and counties have created medical marijuana
access ordinances that can act as a guide for the state. However,
many other cities and counties are calling for more guidance and
regulation from the state and have passed bans or moratoria on
medical marijuana cultivation and distribution while awaiting this
guidance.

end insert begin insert

(4) 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
nonmedical use.

end insert begin insert

(5) Despite the passage of the Compassionate Use Act of 1996
and the MMPA, because of the lack of an effective statewide system
for regulating and controlling medical marijuana, local law
enforcement officials 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.

end insert begin insert

(6) Marijuana has widely accepted medical applications that
make it inappropriate to be classified as a Schedule I controlled
substance in the State of California. Furthermore, current
marijuana laws require costly, mandatory felony penalties for
minor marijuana offenses, imposing excessive legal costs in minor
medical marijuana cases and unduly burdening the state’s law
enforcement and prison system.

end insert begin insert

(7) For the protection of all Californians, the state must act to
regulate and control medical marijuana and not preempt local
government ordinances. Cities and counties should be allowed to
impose reasonable local taxes and enact reasonable zoning
regulations and other restrictions applicable to the cultivation and
distribution of medical marijuana based on local needs.

end insert begin insert

(8) A state entity shall be created to regulate and control the
mandatory registration of all individuals and entities involved in
the commercial cultivation, processing, manufacturing, testing,
transportation, distribution, and sale of medical marijuana in this
state.

end insert begin insert

(9) The provisions of this act are enacted pursuant to the powers
reserved to the State of California and its people under the Tenth
Amendment to the United States Constitution.

end insert begin insert

(b) It is therefore the intent of the Legislature, in enacting this
act, to accomplish all of the following:

end insert begin insert

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

end insert begin insert

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

end insert begin insert

(3) To establish the Division of Medical Marijuana Enforcement
to be located within the Department of Alcoholic Beverage Control
to provide a governmental agency that will ensure the strict, honest,
impartial, and uniform administration and enforcement of the
medical marijuana laws throughout the state.

end insert begin insert

(4) To fulfill the promise of the Compassionate Use Act of 1996
to “implement a plan for the safe and affordable distribution of
marijuana to all patients in medical need of marijuana.”

end insert begin insert

(5) To establish a statewide registration process to identify for
law enforcement which individuals and entities are exempt from
state criminal penalties.

end insert begin insert

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

end insert

begin delete SECTION 1. end delete
begin insert SEC. 3. end insert   

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

 

Chapter  18. Medical 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 Marijuana
Regulation and Enforcement.

(b) “Identification program” means the universal identification
card program for mandatory commercial begin delete restraints end delete begin insert registrants end insert .

(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.

begin insert

begin insert 26010. end insert   

This chapter does not prevent a city or county from
doing any of the following:

(a) Adopting local ordinances that regulate the location,
operation, or establishment of a medical cooperative or collective.

(b) The civil or criminal enforcement of the ordinances
described in subdivision (a).

(c) Enacting other laws consistent with this chapter.

end insert

 

Article 2.  Administration

 

26020.  

(a) There is hereby created in the Department of
Alcoholic Beverage Control the Division of Medical 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 marijuana and medical 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 marijuana and medical 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 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 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 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.  Mandatory Commercial Registration

 

26040.  

(a) By July 1, 2014, the division shall establish a
mandatory commercial registration program and a fee structure
for cultivation, manufacturing, testing, transportation, distribution,
and sale of medical marijuana and medical 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.

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 begin insert and labeling
requirements end insert .

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

(c) A begin delete plan for conformance with local zoning requirements end delete
begin insert showing that any facility proposed in the application has received
local zoning approval end insert .

(d) Protocols to prevent unlawful diversion of marijuana.

begin insert

(e) Evidence that the applicant has received a business license
from the locality in which the facility will be located.

end insert

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 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.

begin delete SEC. 2. end delete
begin insert SEC. 4. end insert   

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.

begin delete SEC. 3. end delete
begin insert SEC. 5. end insert   

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.