Amended in Assembly April 1, 2014

California Legislature—2013–14 Regular Session

Assembly BillNo. 1894


Introduced by Assembly Memberbegin delete Wieckowskiend deletebegin insert Ammianoend insert

February 19, 2014


An act tobegin delete add Section 653.3 to the Penal Code, relating to crimesend deletebegin insert amend Sections 2220.05, 2242, and 2264 of, and to add Chapter 18 (commencing with Section 26000) to Division 9 of, the Business and Professions Code, end insertbegin insertto amend Section 11362.7 of, and to amend and repeal Section 11362.775 of, the Health and Safety Code, end insertbegin insertand to add Chapter 4 (commencing with Section 7294) to Part 1.7 of Division 2 of the Revenue and Taxation Code, relating to medical cannabis, and making an appropriation thereforend insert.

LEGISLATIVE COUNSEL’S DIGEST

AB 1894, as amended, begin deleteWieckowskiend delete begin insertAmmianoend insert. Falsely filed liens or encumbrances.

begin insert

(1) 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, commonly referred to as the Medical Marijuana Program Act, 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.

end insert
begin insert

The Medical Practice Act provides for the regulation and licensing of physicians and surgeons by the Medical Board of California and requires the board to prioritize investigations and prosecutions of physicians and surgeons representing the greatest threat of harm, as specified. Existing law identifies the cases that are to be given priority, which include cases of repeated acts of excessively prescribing, furnishing, or administering controlled substances without a good faith prior examination of the patient. Existing law makes it unprofessional conduct for a physician and surgeon to prescribe, dispense, or furnish dangerous drugs without an appropriate prior examination and medical indication. Existing law also makes it unprofessional conduct to employ, aid, or abet an unlicensed person in the practice of medicine. Existing law generally makes any person who violates these provisions guilty of a misdemeanor.

end insert
begin insert

This bill would enact the Medical Cannabis Regulation and Control Act and would create the Division of Medical Cannabis Regulation and Enforcement within the Department of Alcoholic Beverage Control, to be administered by a person exempt from civil service who is appointed by the Director of Alcoholic Beverage Control. The bill would grant the department the exclusive power to register persons for the cultivation, manufacture, testing, transportation, storage, distribution, and sale of medical cannabis within the state subject to specified exemptions for a city or county. The bill would provide that the director and persons employed by the department to administer and enforce its provisions are peace officers. The bill would prescribe requirements for the issuance, renewal, suspension, and revocation of mandatory commercial registrations and fees in relation to these activities. The bill would permit the department to assist statewide taxation authorities in the development of uniform policies for the taxation of mandatory commercial medical cannabis registrants and to assist in the development of regulation in connection with work safety in this industry. The bill would authorize the division to establish a grant program for the purpose of funding medical cannabis regulation and enforcement.

end insert
begin insert

The bill would establish the Medical Cannabis Regulation Fund and would require deposit of fees into the fund. The bill would continuously appropriate moneys within the fund to the division for the purposes of administering the program. The bill would require the deposit of penalty money into the General Fund.

end insert
begin insert

The bill would require the department, on or before January 1, 2016, to issue regulations as necessary for the implementation and enforcement of mandatory commercial medical cannabis registration, as specified, and would prescribe requirements for provisional registrations to be operative January 1, 2015. The bill would prohibit approval of a mandatory commercial registration for specified reasons, including if a licensed physician making patient recommendations for medical cannabis is an interested party in the proposed operation, and would prohibit a physician from recommending medical cannabis to a patient while he or she is a mandatory commercial registrant, or associated, as specified, with a mandatory commercial registrant. The bill would provide that certain patient and caregiver information is excluded from disclosure to the public. The bill would provide that the actions of a mandatory commercial registrant or provisional registrant, its employees, and its agents that are permitted pursuant to a valid mandatory commercial registration issued by the division and that are conducted in accordance with the requirements of the act are not unlawful, as specified. The bill would provide a similar immunity for a property owner who allows his or her property to be used by a mandatory commercial registrant or provisional registrant.

end insert
begin insert

The bill would require the department to work in conjunction with law enforcement entities throughout the state to implement and enforce the rules and regulations regarding medical cannabis and to take appropriate action against businesses and individuals that fail to comply with the law. The bill would prohibit, on and after January 1, 2016, a person other than a mandatory commercial registrant from selling cannabis or cannabis products or performing other actions related to cannabis, except as specified. The bill would provide that its provisions do not affect local zoning ordinances or laws of general application. The bill would make certain violations of its provisions a crime, thereby imposing a state-mandated local program. The bill would establish requirements for the transportation of medical cannabis. The bill would specify that its provisions are severable.

end insert
begin insert

The bill would specify that recommending marijuana to patients without a good faith examination and medical reason is unprofessional conduct and is a type of case that should be given priority for investigation and prosecution by the Medical Board of California, as described above. The bill would also specify that employment by, or an agreement with, a mandatory medical cannabis registrant to provide recommendations for medical marijuana constitutes unprofessional conduct. By broadening the definition of a crime, the bill would impose a state-mandated local program. The bill would repeal, 90 days after the department posts a specified notice on its Internet Web site, the provisions described above prohibiting prosecution of qualified patients, persons with valid identification cards, and designated primary caregivers who associate in California, collectively or cooperatively, to cultivate marijuana for medical purposes.

end insert
begin insert

(2) Existing law authorizes the board of supervisors of a county and the governing body of a city to levy, increase, or extend a transactions and use tax at a rate of 0.25%, or a multiple thereof, if approved by the required vote of the board or governing body and the required vote of qualified voters, and limits the combined rate of transactions and use taxes within a city or county to 2%.

end insert
begin insert

This bill would additionally authorize the board of supervisors of a county and the governing body of a city to levy, increase, or extend transactions and use taxes on the retail sale of or storage, use, or other consumption of, medical marijuana or medical marijuana-infused products for general and specified purposes, as provided, at a combined rate, as provided, not to exceed 5%.

end insert
begin delete

Existing law governs the procedure for levying an execution lien upon real or personal property and requires the judgment creditor to give the levying officer written instructions containing the information needed or requested by the levying officer to serve the writ, order, notice, or other paper on a person. Under existing law, a person who files any allegation of misconduct against any peace officer, knowing the allegation to be false, is guilty of a misdemeanor.

end delete
begin delete

This bill would make it a misdemeanor for any person to file, attempt to file, or conspire to file, in any public record, or any private record that is generally available to the public, any false lien or encumbrance against the real or personal property of a peace officer, as defined, on account of the performance of that peace officer’s official duties, if the person filing, attempting to file, or conspiring to file the public or private record knows, or has reason to know, that the lien or encumbrance is false or contains any materially false, fictitious, or fraudulent statement or representation. By creating a new crime, this bill would impose a state-mandated local program.

end delete

begin insert(3)end insertbegin insertend insertThe 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: begin deleteno end deletebegin insertyesend insert. Fiscal committee: yes. State-mandated local program: yes.

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

P5    1begin insert

begin insertSECTION 1.end insert  

end insert
begin insert

This act shall be known, and may be cited, as the
2Medical Cannabis Regulation and Control Act.

end insert
3begin insert

begin insertSEC. 2.end insert  

end insert
begin insert

(a) The Legislature finds and declares all of the
4following:

end insert
begin insert

5(1) In 1996, the people of the State of California enacted the
6Compassionate Use Act of 1996, codified in Section 11362.5 of
7the Health and Safety Code. The people of the State of California
8declared that their purpose in enacting the measure was, among
9other things, “to ensure that seriously ill Californians have the
10right to obtain and use marijuana for medical purposes where that
11medical use is deemed appropriate and has been recommended
12by a physician who has determined that the person’s health would
13benefit from the use of marijuana in the treatment of cancer,
14anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis,
15migraine, or any other illness for which marijuana provides relief.”

end insert
begin insert

16(2) The Compassionate Use Act of 1996 called on state
17government to implement a plan for the safe and affordable
18distribution of marijuana to all patients in medical need of
19marijuana.

end insert
begin insert

20(3) In 2003, the Legislature enacted the Medical Marijuana
21Program Act (MMPA), codified in Article 2.5 (commencing with
22Section 11362.7) of Chapter 6 of Division 10 of the Health and
23Safety Code. Under the guidance of the MMPA, approximately 60
24California cities and counties have created medical marijuana
25access ordinances that can act as a guide for the state. However,
26many other cities and counties are calling for more guidance and
27regulation from the state and have passed bans or moratoria on
28medical marijuana cultivation and distribution while awaiting this
29guidance.

end insert
begin insert

30(4) Greater certainty and uniformity are urgently needed
31regarding the rights and obligations of medical marijuana
32facilities, and for the imposition and enforcement of regulations
33to prevent unlawful cultivation and the diversion of marijuana to
34nonmedical use.

end insert
begin insert

35(5) Despite the passage of the Compassionate Use Act of 1996
36and the MMPA, because of the lack of an effective statewide system
37for regulating and controlling medical marijuana, local law
38enforcement officials have been confronted with uncertainty about
P6    1the legality of some medical marijuana cultivation and distribution
2activities. The current system of collectives and cooperatives makes
3law enforcement difficult and endangers patient safety because of
4an inability to monitor the supply of medical marijuana in the state
5 and the lack of quality control, testing, and labeling requirements.
6As a result, many cities and counties have passed local ordinances
7that in some cases ban the cultivation or distribution of medical
8marijuana.

end insert
begin insert

9(6) For the protection of all Californians, the state must act to
10regulate and control medical marijuana and not preempt local
11government ordinances. Cities and counties should be allowed to
12impose reasonable local taxes and enact reasonable zoning
13regulations and other restrictions applicable to the cultivation and
14distribution of medical marijuana based on local needs. In order
15to provide patients with access to safe medical marijuana products,
16while at the same time preventing diversion of marijuana to
17nonmedical uses and protecting the public, it is necessary to amend
18the MMPA and to establish a comprehensive structure for
19regulating the cultivation, production, and distribution of medical
20marijuana products.

end insert
begin insert

21(7) A state entity shall be created to regulate and control the
22mandatory registration of all entities involved in the commercial
23cultivation, processing, manufacturing, testing, transportation,
24distribution, and sale of medical marijuana in this state. Patients
25and their primary caregivers shall continue to be allowed to
26cultivate medical marijuana for the personal medical purposes of
27the individual patient, but only medical marijuana produced in
28compliance with this act may be sold or commercially distributed.

end insert
begin insert

29(8) This act is not intended to prevent cities and counties from
30imposing reasonable local taxes and enacting reasonable zoning
31regulations and other restrictions applicable to the commercial
32cultivation and distribution of medical marijuana based on local
33needs.

end insert
begin insert

34(9) It is the intent of the Legislature that the state entity created
35to regulate and control medical marijuana solicit input from cities
36and counties that have local ordinances or regulations allowing
37for the registering, permitting, or licensing of medical marijuana
38businesses, dispensaries, or other entities involved in providing
39medical marijuana to patients in the process of promulgating
40standards and regulations pursuant to this act.

end insert
begin insert

P7    1(10) It is the intent of the Legislature that entities provided
2immunity under Measure D, approved by the voters of the City of
3Los Angeles on the May 21, 2013, ballot, shall be considered the
4equivalent of entities that are registered, permitted, or licensed as
5a medical marijuana business, dispensary, or other entity involved
6in providing medical marijuana to patients under a local ordinance
7and shall be considered in compliance with a local ordinance for
8the purposes of the implementation of this act and any regulations
9promulgated by the Department of Alcoholic Beverage Control.

end insert
begin insert

10(11) The provisions of this act are enacted pursuant to the
11powers reserved to the State of California and its people under
12the Tenth Amendment to the United States Constitution.

end insert
begin insert

13(12) Nothing in this act is intended to require any individual or
14entity to engage in any conduct that violates federal law or to
15exempt anyone from any requirement of federal law or to pose any
16obstacle to federal enforcement of federal law.

end insert
begin insert

17(b) It is therefore the intent of the Legislature, in enacting this
18act, to accomplish all of the following:

end insert
begin insert

19(1) To establish a statewide system for regulating and
20controlling commercial medical cannabis activities by creating a
21state entity to enact and enforce regulations governing the
22cultivation, processing, manufacturing, testing, transportation,
23distribution, and sale of commercial medical cannabis.

end insert
begin insert

24(2) To allow cities and counties to enact reasonable zoning
25regulations or other restrictions applicable to the cultivation,
26processing, manufacturing, testing, and distribution of commercial
27medical cannabis based on local needs.

end insert
begin insert

28(3) To establish the Division of Medical Cannabis Regulation
29and Enforcement to be located within the Department of Alcoholic
30Beverage Control to provide a governmental agency that will
31ensure the strict, honest, impartial, and uniform administration
32and enforcement of the medical cannabis laws throughout the
33state.

end insert
begin insert

34(4) To fulfill the promise of the Compassionate Use Act of 1996
35to “implement a plan for the safe and affordable distribution of
36marijuana to all patients in medical need of marijuana.”

end insert
begin insert

37(5) To establish a statewide registration process for commercial
38medical cannabis activities to identify for law enforcement which
39entities are exempt from state criminal penalties.

end insert
begin insert

P8    1(6) To reduce the cost of commercial medical cannabis
2enforcement by controlling commercial medical cannabis
3production and distribution through comprehensive statewide
4regulation and providing law enforcement guidelines to more
5easily determine whether or not a person is acting in conformance
6with the state’s medical cannabis laws.

end insert
7begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 2220.05 of the end insertbegin insertBusiness and Professions Codeend insert
8begin insert is amended to read:end insert

9

2220.05.  

(a) In order to ensure that its resources are maximized
10for the protection of the public, the Medical Board of California
11shall prioritize its investigative and prosecutorial resources to
12ensure that physicians and surgeons representing the greatest threat
13of harm are identified and disciplined expeditiously. Cases
14involving any of the following allegations shall be handled on a
15priority basis, as follows, with the highest priority being given to
16cases in the first paragraph:

17(1) Gross negligence, incompetence, or repeated negligent acts
18that involve death or serious bodily injury to one or more patients,
19such that the physician and surgeon represents a danger to the
20public.

21(2) Drug or alcohol abuse by a physician and surgeon involving
22death or serious bodily injury to a patient.

23(3) Repeated acts of clearly excessive prescribing, furnishing,
24or administering of controlled substances, or repeated acts of
25prescribing, dispensing, or furnishing of controlled substancesbegin insert, or
26recommending marijuana to patients for medical purposes,end insert
without
27a good faith prior examination of the patient and medical reason
28therefor. However, in no event shall a physician and surgeon
29prescribing, furnishing, or administering controlled substances for
30intractable pain consistent with lawful prescribing, including, but
31not limited to, Sections 725, 2241.5, and 2241.6 of this code and
32Sections 11159.2 and 124961 of the Health and Safety Code, be
33prosecuted for excessive prescribing and prompt review of the
34applicability of these provisions shall be made in any complaint
35that may implicate these provisions.

36(4) Sexual misconduct with one or more patients during a course
37of treatment or an examination.

38(5) Practicing medicine while under the influence of drugs or
39alcohol.

P9    1(b) The board may by regulation prioritize cases involving an
2allegation of conduct that is not described in subdivision (a). Those
3cases prioritized by regulation shall not be assigned a priority equal
4to or higher than the priorities established in subdivision (a).

5(c) The Medical Board of California shall indicate in its annual
6report mandated by Section 2312 the number of temporary
7restraining orders, interim suspension orders, and disciplinary
8 actions that are taken in each priority category specified in
9subdivisions (a) and (b).

10begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 2242 of the end insertbegin insertBusiness and Professions Codeend insertbegin insert is
11amended to read:end insert

12

2242.  

(a) Prescribing, dispensing, or furnishing dangerous
13drugs as defined in Section 4022begin insert, or recommending marijuana to
14a patient for medical purposes,end insert
without an appropriate prior
15examination and a medical indication,begin insert including an in-person
16examination when recommending marijuana,end insert
constitutes
17unprofessional conduct.

18(b) No licensee shall be found to have committed unprofessional
19conduct within the meaning of this section if, at the time the drugs
20were prescribed, dispensed, or furnished, any of the following
21 applies:

22(1) The licensee was a designated physician and surgeon or
23podiatrist serving in the absence of the patient’s physician and
24surgeon or podiatrist, as the case may be, and if the drugs were
25prescribed, dispensed, or furnished only as necessary to maintain
26the patient until the return of his or her practitioner, but in any case
27no longer than 72 hours.

28(2) The licensee transmitted the order for the drugs to a
29registered nurse or to a licensed vocational nurse in an inpatient
30facility, and if both of the following conditions exist:

31(A) The practitioner had consulted with the registered nurse or
32licensed vocational nurse who had reviewed the patient’s records.

33(B) The practitioner was designated as the practitioner to serve
34in the absence of the patient’s physician and surgeon or podiatrist,
35as the case may be.

36(3) The licensee was a designated practitioner serving in the
37absence of the patient’s physician and surgeon or podiatrist, as the
38case may be, and was in possession of or had utilized the patient’s
39records and ordered the renewal of a medically indicated
P10   1prescription for an amount not exceeding the original prescription
2in strength or amount or for more than one refill.

3(4) The licensee was acting in accordance with Section 120582
4of the Health and Safety Code.

5begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 2264 of the end insertbegin insertBusiness and Professions Codeend insertbegin insert is
6amended to read:end insert

7

2264.  

The employing, directly or indirectly, the aiding, or the
8abetting of any unlicensed person or any suspended, revoked, or
9unlicensed practitioner to engage in the practice of medicinebegin insert,
10including employment by, or other agreement with, a mandatory
11commercial registrant acting pursuant to the Medical Cannabis
12Regulation and Control Act or a dispensary to provide
13recommendations for medical marijuana,end insert
or any other mode of
14treating the sick or afflicted which requires a license to practice
15constitutes unprofessional conduct.

16begin insert

begin insertSEC. 6.end insert  

end insert

begin insertChapter 18 (commencing with Section 26000) is added
17to Division 9 of the end insert
begin insertBusiness and Professions Codeend insertbegin insert, to read:end insert

begin insert

18 

19Chapter  begin insert18.end insert Medical Cannabis Regulation
20

 

21Article begin insert1.end insert  General Provisions
22

 

23

begin insert26000.end insert  

(a) It is the intent of the Legislature in enacting this
24chapter to provide for the comprehensive regulation of the
25commercial cultivation, manufacturing, testing, transportation,
26distribution, and sale of medical cannabis and the enforcement of
27laws relating to commercial medical cannabis activities.

28(b) This chapter is an exercise of the police powers of the state
29for the protection of the safety, welfare, health, peace, and morals
30of the people of the state.

31

begin insert26001.end insert  

Subject to the authority of a city or county pursuant to
32Section 26010, the state shall have the exclusive right and power
33to regulate and register persons for the cultivation, manufacture,
34testing, transportation, storage, distribution, sale, purchase, and
35possession of medical cannabis within the state. In the exercise of
36these rights and powers, the Legislature shall not constitute the
37 state or any of its agencies as a cultivator, manufacturer,
38transporter, tester, or seller of medical cannabis.

39

begin insert26002.end insert  

For the purpose of this chapter:

P11   1(a) “Cannabis” means all parts of the plant Cannabis sativa
2L., whether growing or not; the seeds thereof; the resin extracted
3from any part of the plant; and every compound, manufacture,
4salt, derivative, mixture, or preparation of the plant, its seeds or
5resin. It does not include the mature stalks of the plant, fiber
6produced from the stalks, oil or cake made from the seeds of the
7plant, any other compound, manufacture, salt, derivative, mixture,
8or preparation of the mature stalks (except the resin extracted
9therefrom), fiber, oil, or cake, or the sterilized seed of the plant
10which is incapable of germination. “Cannabis” also means the
11separated resin, whether crude or purified, obtained from
12marijuana.

13(b) “Department” means the Department of Alcoholic Beverage
14Control.

15(c) “Dispensary” means a mandatory commercial registrant
16that dispenses cannabis or medical cannabis products through a
17retail storefront.

18(d) “Division” means the Division of Medical Cannabis
19Regulation and Enforcement.

20(e) “Fund” means the Medical Cannabis Regulation Fund
21established pursuant to Section 26028.

22(f) “Identification program” means the universal identification
23certificate program for mandatory commercial registrants.

24(g) “Mandatory commercial registrant” or “registrant” means
25any individual, partnership, joint venture, association, limited
26 liability company, corporation, estate, trust, receiver, syndicate,
27or any other group or combination thereof acting as a unit to
28commercially cultivate, process, possess, store, manufacture, test,
29transport, distribute, or sell medical cannabis in compliance with
30this chapter, other than a patient or a patient’s primary caregiver,
31as defined by the Compassionate Use Act of 1996, growing,
32possessing, storing, manufacturing, transporting, or providing
33medical cannabis exclusively for the personal medical purposes
34of individual patients as defined in subdivision (b) of Section
3526050.

36(h) “Medical cannabis product” means any cannabis product,
37including concentrates and extractions, that is cultivated,
38processed, packaged, and distributed in full compliance with the
39requirements of this chapter and with any regulations adopted by
40the department pursuant to its rulemaking authority. “Medical
P12   1cannabis product” includes medically infused products that contain
2medical cannabis and are intended for oral or topical consumption
3by a qualified patient.

4(i) “Person” includes any individual, firm, copartnership, joint
5venture, association, corporation, estate, trust, business trust,
6receiver, syndicate, or any other group or combination acting as
7a unit and includes the plural as well as the singular number.

8(j) “Testing and labeling” means mandatory labeling and a
9quality assurance plan in place that addresses all of the following:

10(1) Potency.

11(2) Chemical residue.

12(3) Microbiological contaminants.

13(4) Random sample testing of medical cannabis and medical
14cannabis products.

15(5) Handling, care, and storage.

16(6) Date and location of production and manufacturing.

17

begin insert26010.end insert  

This chapter does not prevent a city or county from
18doing any of the following:

19(a) Adopting local ordinances that ban or regulate the location,
20operation, or establishment of a mandatory commercial registrant.

21(b) The civil or criminal enforcement of the ordinances
22described in subdivision (a).

23(c) Establishing a reasonable fee for the operation of a
24mandatory commercial registrant within its jurisdiction.

25(d) Enacting other laws consistent with this chapter.

26 

27Article begin insert2.end insert  Administration
28

 

29

begin insert26020.end insert  

(a) There is hereby created in the Department of
30Alcoholic Beverage Control the Division of Medical Cannabis
31Regulation and Enforcement. The division shall be administered
32by a person exempt from the civil service who is appointed by the
33director.

34(b) The department shall have the exclusive power, consistent
35with the provisions of this chapter, to register persons for the
36cultivation, manufacture, testing, transportation, storage,
37distribution, and sale of medical cannabis within the state and to
38collect registration fees in connection with these actions.

P13   1

begin insert26022.end insert  

The department shall have all power necessary for
2administration of this chapter, including, but not limited to, the
3following:

4(a) Establishing statewide standards for the commercial
5cultivation, manufacturing, testing, transportation, storage,
6distribution, and sale of medical cannabis and medical cannabis
7products and procedures for the issuance, renewal, suspension,
8and revocation of registrations of mandatory commercial
9registrants.

10(b) Establishing a scale of application, registration, and renewal
11fees, to be imposed by the state, for mandatory commercial
12registrants for the cultivation, manufacturing, testing,
13transportation, distribution, and sale of medical cannabis and
14medical cannabis products. The department may charge separate
15fees for each mandatory commercial registration application for
16cultivation, manufacturing, transportation, distribution, and sale.
17The total fees imposed pursuant to this chapter shall be reasonable
18and based on the actual costs of administering and enforcing this
19chapter.

20(c) The department shall make and prescribe those reasonable
21rules as may be necessary or proper to carry out the purposes and
22intent of this chapter and to enable it to exercise the powers and
23perform the duties conferred upon it by this chapter and in
24accordance with Chapter 3.5 (commencing with Section 11340)
25of Part 1 of Division 3 of Title 2 of the Government Code. For the
26performance of its duties, the department has the powers as set
27forth in Article 2 (commencing with Section 11180) of Chapter 2
28of Part 1 of Division 3 of Title 2 of the Government Code.

29(d) Approving or denying mandatory commercial registration
30applications for cultivation, manufacturing, testing and labeling,
31transportation, distribution, and sale of medical cannabis pursuant
32to this chapter.

33(e) The department shall have the power, in its discretion, to
34deny, suspend, revoke, or fine any registration issued pursuant to
35this chapter if the department determines, for good cause, that the
36granting or continuance of the registration would be contrary to
37public welfare or morals or that a person holding or seeking a
38registration has violated any law prohibiting conduct involving
39moral turpitude.

P14   1(f) Imposing any penalty authorized by this chapter or any rule
2or regulation adopted pursuant to this chapter.

3(g) Taking any reasonable action with respect to a mandatory
4commercial registration application in accordance with procedures
5established pursuant to this chapter.

6(h) Upon the denial of any application for a registration, the
7department shall notify the applicant in writing. After service of
8the notice and within the time prescribed by the department, the
9applicant may present his or her written petition for a registration
10to the department. Upon receipt by the department of a petition
11for a registration in proper form, the petition shall be set for
12hearing.

13(i) (1) For any hearing held pursuant to this chapter, the
14department may delegate the power to hear and decide to an
15administrative law judge appointed by the director. Any hearing
16before an administrative law judge shall be pursuant to the
17procedures, rules, and limitations prescribed in Chapter 5
18(commencing with Section 11500) of Part 1 of Division 3 of Title
192 of the Government Code.

20(2) Prior to suspending, revoking, or fining any registration,
21the department shall file an accusation as provided for in Section
2211503 of the Government Code, and the registrant may request a
23hearing.

24(j) Developing any forms, identification certificates, and
25applications that are necessary or convenient in the reasonable
26discretion of the department for the administration of this chapter
27or any of the rules or regulations adopted pursuant to this chapter.

28(k) Overseeing the operation of the Medical Cannabis
29Regulation Fund established pursuant to Section 26028.

30(l) Establishing reasonable fees for processing all applications,
31registrations, notices, or reports required to be submitted to the
32department. The amount of the fees shall reflect, but shall not
33exceed, the direct and indirect costs of the department for the
34administration of this chapter and the rules or regulations adopted
35pursuant to this chapter.

36(m) The department may consult with other state agencies,
37departments, or public or private entities for the purposes of
38establishing statewide standards and regulations.

P15   1

begin insert26024.end insert  

(a) The department may assist state taxation authorities
2in the development of uniform policies for the taxation of
3mandatory commercial registrants.

4(b) The department shall assist the Division of Occupational
5Safety and Health in the Department of Industrial Relations in the
6development of industry-specific regulations related to commercial
7medical cannabis activities.

8

begin insert26028.end insert  

(a) The Medical Cannabis Regulation Fund is hereby
9established within the State Treasury. Notwithstanding Section
1016305.7 of the Government Code, the fund shall include any
11interest and dividends earned on the money in the fund.

12(b) All fees collected pursuant to this chapter shall be deposited
13into the Medical Cannabis Regulation Fund. Notwithstanding
14Section 13340 of the Government Code, all moneys within the fund
15are hereby continuously appropriated, without regard to fiscal
16year, to the department solely for the purposes of fully funding
17and administering this chapter, including, but not limited to, the
18costs incurred by the department for its administrative expenses.

19(c) All moneys collected pursuant to this chapter as a result of
20penalties imposed under this division shall be deposited directly
21into the General Fund, to be available upon appropriation.

22(d) The department may establish and administer a grant
23program to allocate moneys from the Medical Cannabis Regulation
24Fund to state and local entities for the purpose of assisting with
25commercial medical cannabis regulation and the enforcement of
26this chapter.

27

begin insert26030.end insert  

(a) The director and the persons employed by the
28department for the administration and enforcement of this chapter
29are peace officers in the enforcement of the penal provisions of
30this chapter, the rules of the department adopted under the
31provisions of this chapter, and any other penal provisions of law
32of this state prohibiting or regulating the cultivation, processing,
33storing, manufacturing, testing, transporting, or selling of medical
34cannabis, and these persons are authorized, while acting as peace
35officers, to enforce any penal provisions of law while in the course
36of their employment.

37(b) The director, the persons employed by the department for
38the administration and enforcement of this chapter, peace officers
39listed in Section 830.1 of the Penal Code, and those officers listed
40in Section 830.6 of the Penal Code while acting in the course and
P16   1scope of their employment as peace officers may, in enforcing the
2provisions of this chapter, visit and inspect the premises of any
3mandatory commercial registrant at any time during which the
4registrant is acting pursuant to the registration.

5(c) Peace officers of the Department of the California Highway
6Patrol, members of the University of California and California
7State University police departments, and peace officers of the
8Department of Parks and Recreation, as defined in subdivisions
9(a), (b), (c), and (f) of Section 830.2 of the Penal Code, may, in
10enforcing this chapter, visit and inspect the premises of any
11mandatory commercial registrant located on state property at any
12time during which the registrant is acting pursuant to the
13registration.

14

begin insert26034.end insert  

(a) Information identifying the names of patients, their
15medical conditions, or the names of their primary caregivers
16received and contained in records kept by the department for the
17purposes of administering this chapter are confidential and exempt
18from the California Public Records Act (Chapter 3.5 (commencing
19with Section 6250) of Division 7 of Title 1 of the Government Code)
20and or not subject to disclosure to any individual or private entity,
21except as necessary for authorized employees of the State of
22California to perform official duties pursuant to this chapter:

23(b) (1) Nothing in this section precludes the following:

24(A) Division employees notifying state or local law enforcement
25about information submitted to the division that the employee
26suspects is falsified or fraudulent.

27(B) Notifications from the division to state or local law
28enforcement about apparent criminal violation of this chapter.

29(C) Verification of requests by state or local law enforcement
30to confirm registrants and certificates issued by the division or
31other state agency.

32(D) Provision of information requested pursuant to a court
33order or subpoena issued by a court.

34(2) Information shall not be disclosed beyond what is necessary
35to achieve the limited goals of a specific investigation or the
36parameters of a specific court order or subpoena.

 

P17   1Article begin insert3.end insert  Mandatory Commercial Registration
2

 

3

begin insert26040.end insert  

(a) On or before January 1, 2016, the department shall
4promulgate regulations necessary for the implementation and
5enforcement of this chapter. These regulations shall be reasonable
6and shall include:

7(1) Procedures for the issuance, renewal, suspension, and
8revocation of mandatory commercial registrations.

9(2) Application, registration, and renewal forms and fees
10consistent with this act.

11(3) Time periods, not to exceed 90 days, by which the department
12shall approve or deny an application for medical cannabis
13registration.

14(4) Qualifications for registrants.

15(5) Security requirements, including, but not limited to,
16procedures for limiting access to facilities and for the screening
17of employees. The department shall require all registrants to
18maintain an accurate roster of any employee’s name, date of birth,
19and relevant personally identifying information, which shall be
20available for inspection by the department or state or local law
21enforcement upon demand.

22(6) Testing and labeling requirements, including, but not limited
23to, disclosure of the active cannabinoid profile, constituent
24elements, active ingredients, and results of testing for
25contaminants.

26(7) Health and safety requirements, including, but not limited
27to, prohibitions on shipping or distribution of products containing
28microbiological, bacterial, pathogenic yeast or mold counts, or
29any adulterant or contaminant, that exceed levels to be determined
30by the department.

31(8) Inspection and tracking requirements, including, but not
32limited to, an electronic production and inventory tracking system
33that will allow the department to monitor inventory data at every
34level of the cultivation, processing, and distribution system through
35a secure, Internet Web site-based portal.

36(9) Storage, packaging, and transportation procedures and
37protocols.

38(10) Advertising restrictions and requirements.

39(11) Requirements to ensure conformance with applicable state
40statutory environmental, agricultural, and food and product safety
P18   1requirements. The department may consult with the California
2Environmental Protection Agency to determine whether additional
3 regulations should be issued in order to protect the state’s clean
4water and environment, including, but not limited to, protections
5related to land conversion, grading, water diversion and pond
6development, and agricultural discharges.

7(12) Requirements to prevent the diversion of cannabis to
8nonmedical use, including procedures and protocols for disposal
9of excess, contaminated, adulterated, or deteriorated products.

10(13) Civil penalties for the failure to comply with regulations
11adopted pursuant to this chapter.

12(b) A mandatory commercial registration application or renewal
13shall not be approved if the department determines any of the
14following:

15(1) The applicant fails to meet the requirements of this chapter
16or any regulation adopted pursuant to this chapter, including any
17applicable city or county ordinance or regulation.

18(2) The applicant, or any of its officers or directors, is under
1921 years of age.

20(3) The applicant has knowingly answered a question or request
21for information falsely on the application form or failed to provide
22information requested.

23(4) The applicant, or any of its officers or directors, has been
24convicted in the previous five years of a violent felony, as specified
25in subdivision (c) of Section 667.5 of the Penal Code, a serious
26felony as specified in subdivision (c) of Section 1192.7 of the Penal
27Code, a felony offense involving fraud or deceit, or any other felony
28that, in the department’s estimation, would impair the applicant’s
29ability to appropriately operate as a mandatory commercial
30registrant.

31(5) The applicant, or any of its officers or directors, is a licensed
32physician making patient recommendations for medical cannabis.

33(6) The applicant, or any of its officers or directors, has been
34sanctioned by the department, a city, or a county for unregistered
35commercial medical cannabis activities or has had a mandatory
36commercial registration revoked in the previous three years.

37(7) A sufficient number of mandatory commercial registrants
38already exists in the state, a city, or a county to provide a sufficient
39amount of medical cannabis to satisfy patients’ medical use in that
40jurisdiction.

P19   1(c) (1) In order to protect the public safety and provide patients
2with prompt, safe access to medical cannabis during
3implementation of this chapter, within 180 days of January 1,
42015, the department shall issue emergency regulations consistent
5with this chapter that allow a qualified applicant for mandatory
6commercial registration to apply, be reviewed, and be registered
7to cultivate, process, manufacture, store, and transport medical
8cannabis so as to ensure an adequate supply of medical cannabis
9upon full implementation of this chapter.

10(2) The department shall establish appropriate fees as part of
11its emergency regulations adopted pursuant to this chapter.

12

begin insert26042.end insert  

For the purpose of regulating the commercial
13cultivation, manufacturing, testing, transportation, distribution,
14and sale of medical cannabis, the department, in its reasonable
15discretion, may establish various classes or types of registration
16for specific commercial medical cannabis-related activities, as set
17forth in this chapter.

18

begin insert26043.end insert  

(a) Each mandatory commercial registration
19application approved by the department pursuant to this chapter
20is separate and distinct. An applicant may apply for mandatory
21commercial registration in more than one class of specified medical
22cannabis activities.

23(b) A mandatory commercial registration application approved
24by the department pursuant to this chapter shall be valid for a
25period not to exceed one year from the date of approval unless
26revoked or suspended pursuant to this chapter or the rules or
27regulations adopted pursuant to this chapter.

28

begin insert26044.end insert  

(a) The department shall limit the number of
29registrations statewide for the cultivation, processing, extraction,
30packaging, and transportation of medical cannabis to a number
31no greater than what is necessary to meet statewide need. In
32determining the appropriate number of registrations, the
33department may take into account information obtained from
34sources that include, but need not be limited to, municipalities,
35patients, and registrants.

36(b) The department shall ensure that the number of registrations
37that it approves does not exceed the ability of the department to
38enforce the provisions of this chapter, particularly with respect to
39ensuring patient safety and preventing illegal diversion of
40cannabis.

P20   1(c) In establishing limits pursuant to this section, the department
2shall consider the following:

3(1) The purposes and intent of the Compassionate Use Act of
41996 to ensure an adequate supply of medical cannabis while
5endeavoring to prevent an oversupply of cannabis that may result
6in diversion.

7(2) The number of applicants for mandatory commercial
8registrations whose application demonstrates that they will be
9able to produce consistent products with strict quality controls,
10in full compliance with this chapter and with all applicable state
11and local regulations, and the amount of medical cannabis those
12applicants will be able to provide.

13

begin insert26045.end insert  

Every mandatory commercial registration is renewable
14unless the registration has been revoked if the renewal registration
15is made and the fee for it is paid. All registrations expire at 12
16midnight on the last day of the month posted on the registration.
17All registrations issued shall be renewed as follows:

18(a) On or before the first of the month preceding the month
19posted on the registration, the department shall mail to each
20registrant at his or her registered premises, or at any other mailing
21address that the registrant has designated, an application to renew
22the registration.

23(b) The application to renew the registration may be filed before
24the registration expires upon payment of the annual fee.

25(c) For 60 days after the registration expires, the registration
26may be renewed upon payment of the annual renewal fee plus a
27penalty fee that shall be equal to 50 percent of the annual fee.

28(d) Unless otherwise terminated, or unless renewed pursuant
29to subdivision (b) or (c), a registration that is in effect on the month
30posted on the registration continues in effect through 12 midnight
31of the 60th day following the month posted on the registration, at
32which time it is automatically canceled.

33(e) On or before the 10th day preceding the cancellation of a
34registration, the department shall mail a notice of cancellation to
35each registrant that has not either filed an application to renew
36its registration or notified the department of its intent not to do
37so. Failure to mail the renewal application in accordance with
38subdivision (a) or to mail the notice provided in this subdivision
39shall not continue the right to a registration.

P21   1(f) A registration that has been canceled pursuant to subdivision
2(d) may be reinstated during the 30 days immediately following
3cancellation upon payment by cashier’s check or money order of
4the annual renewal fee, plus a penalty fee that shall be equal to
5100 percent of the annual fee. A registration that has been canceled
6pursuant to subdivision (d) and that has not been reinstated within
730 days pursuant to this subdivision is automatically revoked on
8the 31st day after the registration has been canceled.

9(g) A renewal application shall not be deemed filed within the
10meaning of this section unless the document itself has been actually
11delivered to, and the required renewal fee has been paid at, any
12office of the department during office hours, or unless both the
13document and fee have been filed and remitted pursuant to Section
1411003 of the Government Code.

15

begin insert26046.end insert  

An application for mandatory commercial registration
16shall include, but shall not be limited to, all of the following:

17(a) For all applicants:

18(1) The legal name and proposed physical addresses of the
19mandatory commercial registrant.

20(2) The name, address, and date of birth of each principal officer
21and board member.

22(3) Operating and inventory control procedures to ensure
23security and prevent diversion.

24(4) Detailed operating procedures for the proposed facility,
25which shall include, but not be limited to, provisions for facility
26and operational security, prevention of diversion, employee
27screening, storage of medical cannabis, personnel policies, and
28recordkeeping procedures.

29(5) A list of all persons or entities having an ownership interest
30other than a security interest, lien, or encumbrance on any property
31that will be used by the applicant.

32(6) Evidence of the legal right to occupy and use an established
33location, or an immunity from prosecution for that occupancy or
34use pursuant to a local ordinance or ordinances, for the activities
35to be conducted if the desired registration is granted consistent
36with the provisions of this chapter and the regulations developed
37by the department.

38(7) Documentation that the applicant will be in compliance with
39all local ordinances and regulations, including an entity granted
P22   1 immunity under Measure D, approved by the voters of the City of
2Los Angeles on the May 21, 2013, ballot.

3(8) Evidence that officers and owners of the applicant
4organization are citizens of the United States and residents of the
5State of California.

6(b) In addition to the requirements of subdivision (a), for
7cultivation and processing applicants, detailed operating
8procedures for cultivation, extraction and infusion methods,
9transportation of products, inventory procedures, procedures for
10quality control, and onsite testing of product for potential
11contaminants.

12

begin insert26047.end insert  

Upon receipt of an application for a registration and
13the applicable fee, the department shall make a thorough
14investigation to determine whether the applicant and the premises
15for which a registration is applied qualify for the registration and
16whether the provisions of this chapter have been complied with,
17and shall investigate all matters connected therewith which may
18affect the public welfare and morals. The department shall deny
19an application for a registration if either the applicant or the
20premises for which a registration is applied do not qualify for a
21registration under this chapter. The department further shall deny
22an application for a registration if issuance of that registration
23would tend to create a law enforcement problem. The department
24may place reasonable conditions upon registrations if grounds
25exist for denial of the registration, and the department finds those
26grounds may be removed by the imposition of those conditions.

27

begin insert26048.end insert  

A physician shall not recommend medical cannabis to
28a patient while the physician is a mandatory commercial registrant,
29or an officer, director, employee, or financial beneficiary of a
30mandatory commercial registrant.

31

begin insert26049.end insert  

(a) The actions of a mandatory commercial registrant
32or provisional registrant, its employees, and its agents, permitted
33pursuant to a mandatory commercial registration or provisional
34registration issued by the department or otherwise permitted by
35this chapter, that are conducted in accordance to the requirements
36of this chapter and regulations adopted pursuant to the authority
37granted by this chapter, are not unlawful and shall not be an
38offense subject to arrest, prosecution, or other sanction under state
39or local law, or be subject to a civil fine or be a basis for seizure
40or forfeiture of assets under state or local law.

P23   1(b) The actions of a person who, in good faith and upon
2appropriate investigation, allows his or her property to be used
3by a mandatory commercial registrant or provisional registrant,
4its employees, and its agents, as permitted pursuant to a mandatory
5commercial registration or provisional registration issued by the
6department or otherwise permitted by this chapter, are not unlawful
7and shall not be an offense subject to arrest, prosecution, or other
8sanction under state or local law, or be subject to a civil fine or
9be a basis for seizure or forfeiture of assets under state or local
10law.

11

begin insert26050.end insert  

(a) A registrant shall not cultivate, process, store,
12manufacture, test, transport, or sell medical cannabis in the state
13unless accurate records are kept at the registered premises of the
14growing, processing, storing, manufacturing, testing, transporting,
15or selling by the registrant in the state. These records shall include
16all expenditures incurred by the registrant, provided that a
17registrant registered to act at more than one premises may keep
18all records at one of the registered premises. Required records
19shall be kept for a period of three years from the date of the
20transaction.

21(b) The department may make any examination of the books
22and records of any registrant and may visit and inspect the
23premises of any registrant that the department may deem necessary
24to perform its duties under this chapter.

25

begin insert26052.end insert  

(a) This chapter shall not apply to, and shall have no
26diminishing effect on, the rights and protections granted to a
27patient or a primary caregiver pursuant to the Compassionate Use
28Act of 1996.

29(b) (1) A patient who cultivates, possesses, stores, manufactures,
30or transports cannabis exclusively for his or her personal medical
31use and who does not sell or distribute cannabis is not considered
32a commercial registrant and is exempt from mandatory commercial
33registration.

34(2) A primary caregiver who cultivates, possesses, stores,
35manufactures, transports, or provides cannabis exclusively for the
36personal medical purposes of a specified qualified patient for
37whom he or she is the primary caregiver within the meaning of
38Section 11362.7 of the Health and Safety Code and who does not
39sell or distribute cannabis except for compensation in full
40compliance with subdivision (c) of Section 11362.765 of the Health
P24   1and Safety Code is not considered a commercial registrant and is
2exempt from mandatory commercial registration.

3

begin insert26054.end insert  

Beginning January 1, 2014, the department shall
4provide for provisional registrations as follows:

5(a) The department shall request that every city or county,
6provide the department with a list of approved entities providing
7medical cannabis to qualified patients and caregivers within the
8city or county’s jurisdiction, the location at which the entity is
9operating, and the names of the persons who operate the entity.
10Unless the jurisdiction represents that the entity has not been
11operating in compliance with local laws and regulations, or does
12not have limited immunity under local laws, the department shall
13issue a provisional registration to the entity until the time that the
14entity’s application for mandatory commercial registration has
15been approved or denied under this chapter, but no later than 90
16days after the department begins accepting applications for
17mandatory commercial registration.

18(b) The department shall issue a provisional registration to
19individuals and entities that the department determines were,
20during the six months prior to January 1, 2015, regularly
21cultivating or distributing medical cannabis collectively or
22cooperatively in full compliance with paragraphs A and B of
23Section IV of the Guidelines for Security and Non-Diversion of
24Marijuana Grown for Medical Use, issued by the Department of
25Justice in August 2008, to continue to do so until such time as the
26registrant’s application for mandatory commercial registration
27has been approved or denied under this chapter, but no later than
2890 days after the department begins accepting applications for
29mandatory commercial registration. In determining compliance,
30the department shall consider any complaints or actions made or
31 brought by a city or county against the individual or entity. To
32qualify, provisional registrants shall be required to disclose to the
33department the following information in writing on or before
34January 20, 2015, in order to obtain provisional registration:

35(1) The names, addresses, and dates of birth of each principal
36officer, owner, or board member.

37(2) The common street address and assessor’s parcel number
38of the property at which any cultivation activity was or is to be
39conducted.

P25   1(3) For the six months prior to January 1, 2015, the quantity of
2cannabis cultivated at a location and the quantity expected to be
3cultivated from January 1, 2015, to June 30, 2015, inclusive. The
4registrant shall make its records of current activity and activity
5for the six months prior to January 1, 2015, available to the
6department upon request.

7(c) The department shall charge an application fee of five
8thousand dollars ($5,000) for each provisional registration.

9

begin insert26055.end insert  

Entities that are provided immunity under Measure D,
10approved by the voters of the City of Los Angeles on the May 21,
112013, ballot, shall be considered the equivalent of entities that are
12registered, permitted, or licensed as a medical marijuana business,
13dispensary, or other entity involved in providing medical marijuana
14to patients under a local ordinance and shall be considered in
15compliance with a local ordinance for the purposes of the
16implementation of the act adding this section and any regulations
17promulgated by the department.

18

begin insert26056.end insert  

In addition to other regulations adopted by the
19department pertaining to mandatory commercial registrants and
20without limiting the authority of a city or a county pursuant to
21Section 26010 or subdivision (b) of Section 26060, the department
22shall adopt regulations regarding the minimum standards for the
23operation of dispensaries that establish all of the following:

24(a) Standards for labeling of products, including the name of
25the mandatory commercial registrant from which the product was
26obtained, and a requirement that dispensaries provide patients
27with detailed written information about the contents of the cannabis
28and medical cannabis products they obtain.

29(b) Requirements for inventory control and reporting that
30require all dispensaries to be able to demonstrate the present
31location, amounts, and descriptions of all medical cannabis
32products from the time of delivery to the dispensary until purchase
33by a qualified patient or primary caregiver.

34(c) The maximum number of dispensaries that may operate in
35a city or county or the unincorporated areas of a county based on
36population, taking into consideration the distances that patients
37in rural areas may need to travel in order to reach a dispensary
38and the availability of public transportation in both rural and
39urban areas.

P26   1(d) Minimum educational and testing requirements for
2dispensary staff, including background checks, and a requirement
3that every dispensary maintain dedicated security staff both inside
4and outside the dispensary.

5(e) Maximum hours of operation for every dispensary.

6(f) Minimum standards governing signage and advertising for
7dispensaries.

8

begin insert26057.end insert  

The department shall make recommendations to the
9Legislature pertaining to the establishment of an appeals and
10judicial review process for persons aggrieved by a final decision
11of the department.

12 

13Article begin insert4.end insert  Enforcement
14

 

15

begin insert26060.end insert  

(a) The department shall work in conjunction with law
16enforcement entities throughout the state for the purpose of
17implementing and enforcing the rules and regulations regarding
18commercial medical cannabis and taking appropriate action
19against businesses and individuals who fail to comply with the
20law.

21(b) Nothing in this chapter shall prevent a city, county, or city
22and county from enforcing a zoning ordinance or law of general
23application.

24

begin insert26062.end insert  

Except for a person identified in Section 26052, a
25person shall not exercise the privilege or perform any act that a
26registrant may exercise or perform under the authority of a
27registration unless the person is acting pursuant to a registration,
28including a provisional registration, issued pursuant to this
29chapter.

30

begin insert26063.end insert  

(a) Commencing January 1, 2016, any product
31containing cannabis that is distributed, except in the case of a
32primary caregiver distributing to a qualified patient, or offered
33for sale shall comply with the testing and labeling requirements
34established through regulation by the department.

35(b) No person shall steal or fraudulently use a mandatory
36commercial registrant identification certificate or registration or
37other registrant’s identification card or registration issued by the
38department to acquire, cultivate, transport, produce, possess for
39sale, sell, or distribute cannabis.

P27   1(c) No person shall counterfeit, tamper with, or fraudulently
2produce an identification card or registration status.

3(d) Any person who violates this section, or Section 26062, is
4guilty of a misdemeanor and shall be subject to the following
5penalties:

6(1) For the first offense, imprisonment in a county jail for no
7more than six months or a fine not to exceed one thousand dollars
8($1,000), or both.

9(2) For a second or subsequent offense, imprisonment in a
10county jail for no more than one year or a fine not to exceed one
11thousand dollars ($1,000), or both.

12(e) Any person who is charged, prosecuted, or subjected to a
13civil penalty under this chapter shall not also be charged or
14prosecuted pursuant to the Health and Safety Code for conduct
15arising from the same set of facts.

16

begin insert26064.end insert  

Any person operating an unregistered facility, building,
17structure, or location where cannabis is being commercially
18cultivated, manufactured, or possessed for sale in violation of this
19chapter may be subject to civil penalties of up to twenty-five
20thousand dollars ($25,000) for each violation, and the department
21may order the destruction of any cannabis associated with that
22violation. Any civil fines collected pursuant to this section shall
23be deposited into the General Fund pursuant to Section 26028.

24

begin insert26066.end insert  

The director may bring an action to enjoin a violation
25or the threatened violation of any provision of this chapter,
26including, but not limited to, a registrant’s failure to correct
27objectionable conditions following notice or as a result of any rule
28promulgated pursuant to this chapter. The action shall be brought
29in the county in which the violation occurred or is threatened to
30occur. Any proceeding brought pursuant to this chapter shall
31conform to the requirements of Chapter 3 (commencing with
32Section 525) of Title 7 of Part 2 of the Code of Civil Procedure.

33

begin insert26068.end insert  

(a) A state or local law enforcement agency shall
34immediately notify the department of any arrests made for
35violations over which the department has jurisdiction which involve
36a registrant or registered premises. Notice shall be given within
3710 days of the arrest. The department shall promptly cause an
38investigation to be made as to whether grounds exist for suspension
39or revocation of a registration of the registrant.

P28   1(b) The department shall not open or add an entry to a file or
2initiate an investigation of a registrant or suspend or revoke a
3registration in either of the following circumstances:

4(1) Solely because the registrant or an agent acting on behalf
5of the registrant has reported to a state or local law enforcement
6agency that suspected controlled substance violations have taken
7place on the registered premises.

8(2) Solely based on activities constituting violations described
9in a report made under paragraph (1), unless the violations
10reported occurred with the actual knowledge and willful consent
11of the registrant.

12

begin insert26070.end insert  

Nothing in this chapter shall be construed to limit a
13law enforcement agency’s ability to investigate unlawful activity
14in relation to a mandatory commercial registrant.

15

begin insert26072.end insert  

The department shall create and maintain a searchable
16database that will allow state and local law enforcement to verify
17a mandatory commercial registration.

18 

19Article begin insert5.end insert  Transportation of Medical Cannabis
20

 

21

begin insert26100.end insert  

To claim the protections of this chapter and to maintain
22a valid mandatory commercial registration, a registrant shall ship
23medical cannabis products only in response to a request for a
24specific quantity and variety from a registered dispensary or
25mandatory commercial registrant.

26

begin insert26102.end insert  

(a) Prior to transporting any medical cannabis product,
27a mandatory commercial registrant shall do the following:

28(1) Complete a shipping manifest using a form prescribed by
29the department.

30(2) Securely transmit a copy of the manifest to the mandatory
31commercial registrant that will receive the medical cannabis
32product and to the department prior to transport.

33(b) The mandatory commercial registrant shipping and the
34registrant receiving shall maintain each shipping manifest and
35make it available to the department upon request.

36

begin insert26104.end insert  

(a) Transported medical cannabis products shall:

37(1) Be transported only in a locked, safe and secure storage
38compartment that is securely affixed to the interior of the
39transporting vehicle.

40(2) Not be visible from outside the vehicle.

P29   1(b) Any vehicle transporting medical cannabis products shall
2travel directly from the facilities of mandatory commercial
3registrant to the registrant authorized to receive the shipment.

4

begin insert26106.end insert  

(a) A mandatory commercial registrant shall staff all
5transport vehicles with a minimum of two employees. At least one
6delivery team member shall remain with the vehicle at all times
7that the vehicle contains medical cannabis.

8(b) Each delivery team member shall have access to a secure
9form of communication by which each member can communicate
10with personnel at the mandatory commercial registrant facility at
11all times that the vehicle contains medical cannabis.

12(c) Each delivery team member shall possess documentation of
13mandatory commercial registration and a government-issued
14identification card at all times when transporting or delivering
15medical cannabis and shall produce it to any representative of the
16department or law enforcement official upon request.

end insert
17begin insert

begin insertSEC. 7.end insert  

end insert

begin insertSection 11362.7 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
18amended to read:end insert

19

11362.7.  

For purposes of this article, the following definitions
20shall apply:

21(a) “Attending physician” means an individual who possesses
22a license in good standing to practice medicine or osteopathy issued
23by the Medical Board of California or the Osteopathic Medical
24Board of California and who has taken responsibility for an aspect
25of the medical care, treatment, diagnosis, counseling, or referral
26of a patient and who hasbegin delete conducted a medical examination of that
27patient before recording in the patient’s medical record the
28physician’s assessment of whetherend delete
begin insert end insertbegin insertperformed an appropriate prior
29examination, found that end insert
the patient has abegin delete serious medical condition
30and whether the medical use of marijuana is appropriateend delete
begin insert medical
31indication, and recommends marijuana for medical purposes to
32treat a serious medical conditionend insert
.

33(b) “Department” means the State Department ofbegin delete Health Servicesend delete
34begin insert Public Healthend insert.

35(c) “Person with an identification card” means an individual
36who is a qualified patient who has applied for and received a valid
37identification card pursuant to this article.

38(d) “Primary caregiver” means the individual, designated by a
39qualified patient or by a person with an identification card, who
40has consistently assumed responsibility for the housing, health, or
P30   1safety of that patient or person, and may include any of the
2following:

3(1) In any case in which a qualified patient or person with an
4identification card receives medical care or supportive services,
5or both, from a clinic licensed pursuant to Chapter 1 (commencing
6with Section 1200) of Division 2, a health care facility licensed
7pursuant to Chapter 2 (commencing with Section 1250) of Division
82, a residential care facility for persons with chronic life-threatening
9illness licensed pursuant to Chapter 3.01 (commencing with Section
101568.01) of Division 2, a residential care facility for the elderly
11licensed pursuant to Chapter 3.2 (commencing with Section 1569)
12 of Division 2, a hospice, or a home health agency licensed pursuant
13to Chapter 8 (commencing with Section 1725) of Division 2, the
14owner or operator, or no more than three employees who are
15designated by the owner or operator, of the clinic, facility, hospice,
16or home health agency, if designated as a primary caregiver by
17that qualified patient or person with an identification card.

18(2) An individual who has been designated as a primary
19caregiver by more than one qualified patient or person with an
20identification card, if every qualified patient or person with an
21identification card who has designated that individual as a primary
22caregiver resides in the same city or county as the primary
23caregiver.

24(3) An individual who has been designated as a primary
25caregiver by a qualified patient or person with an identification
26card who resides in a city or county other than that of the primary
27caregiver, if the individual has not been designated as a primary
28caregiver by any other qualified patient or person with an
29identification card.

30(e) A primary caregiver shall be at least 18 years of age, unless
31the primary caregiver is the parent of a minor child who is a
32qualified patient or a person with an identification card or the
33primary caregiver is a person otherwise entitled to make medical
34decisions under state law pursuant to Sections 6922, 7002, 7050,
35or 7120 of the Family Code.

36(f) “Qualified patient” means a person who is entitled to the
37protections of Section 11362.5, but who does not have an
38identification card issued pursuant to this article.

39(g) “Identification card” means a document issued by the State
40Department ofbegin insert Publicend insert Healthbegin delete Servicesend delete that document identifies a
P31   1person authorized to engage in the medical use of marijuana and
2the person’s designated primary caregiver, if any.

3(h) “Serious medical condition” means all of the following
4medical conditions:

5(1) Acquired immune deficiency syndrome (AIDS).

6(2) Anorexia.

7(3) Arthritis.

8(4) Cachexia.

9(5) Cancer.

10(6) Chronic pain.

11(7) Glaucoma.

12(8) Migraine.

13(9) Persistent muscle spasms, including, but not limited to,
14spasms associated with multiple sclerosis.

15(10) Seizures, including, but not limited to, seizures associated
16with epilepsy.

17(11) Severe nausea.

18(12) Any other chronic or persistent medical symptom that
19either:

20(A) Substantially limits the ability of the person to conduct one
21or more major life activities as defined in the Americans with
22Disabilities Act of 1990 (Public Law 101-336).

23(B) If not alleviated, may cause serious harm to the patient’s
24safety or physical or mental health.

25(i) “Written documentation” means accurate reproductions of
26those portions of a patient’s medical records that have been created
27by the attending physician, that contain the information required
28by paragraph (2) of subdivision (a) of Section 11362.715, and that
29the patient may submit to a county health department or the
30county’s designee as part of an application for an identification
31card.

32begin insert

begin insertSEC. 8.end insert  

end insert

begin insertSection 11362.775 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
33amended to read:end insert

34

11362.775.  

begin insert(a)end insertbegin insertend insert Qualified patients, persons with valid
35identification cards, and the designated primary caregivers of
36qualified patients and persons with identification cards, who
37associate within the State of California in order collectively or
38cooperatively to cultivate marijuana for medical purposes, shall
39not solely on the basis of that fact be subject to state criminal
P32   1sanctions under Section 11357, 11358, 11359, 11360, 11366,
211366.5, or 11570.

begin insert

3(b) This section shall remain in effect only until 90 days after
4the Department of Alcoholic Beverage Control posts a notice on
5its Internet Web site that it began accepting applications for
6mandatory commercial registration pursuant to Article 3
7(commencing with Section 26040) of Chapter 18 of Division 9 of
8the Business and Professions Code, and as of that date is repealed.

end insert
9begin insert

begin insertSEC. 9.end insert  

end insert

begin insertChapter 4 (commencing with Section 7294) is added
10to Part 1.7 of Division 2 of the end insert
begin insertRevenue and Taxation Codeend insertbegin insert, to
11read:end insert

begin insert

12 

13Chapter  begin insert4.end insert Local Medical Marijuana Taxes
14

 

15Article begin insert1.end insert  Counties Medical Marijuana Tax
16

 

17

begin insert7294.end insert  

(a) Notwithstanding any other law, the board of
18supervisors of any county may levy, increase, or extend a
19transactions and use tax for tangible personal property that is
20medical marijuana or medical marijuana-infused products for
21general purposes if the ordinance proposing that tax is approved
22by a two-thirds vote of all members of the board of supervisors
23and the tax is approved by a majority vote of the qualified voters
24of the county voting in an election on the issue. The board of
25supervisors may levy, increase, or extend more than one
26transactions and use tax under this section, if the adoption of each
27tax is in the manner prescribed in this section.

28(b) (1) The transactions and use tax shall conform to Part 1.6
29 (commencing with Section 7251).

30(2) Notwithstanding Section 7251.1, the tax rate authorized by
31this section shall not be considered for purposes of the combined
32rate established by that section.

33

begin insert7294.5.end insert  

(a) Notwithstanding any other law, the board of
34supervisors of any county may levy, increase, or extend a
35transactions and use tax for tangible personal property that is
36medical marijuana or medical marijuana-infused products for
37specific purposes. The tax may be levied, increased, or extended
38for the purpose for which it is established, if all of the following
39requirements are met:

P33   1(1) The ordinance proposing that tax is approved by a two-thirds
2vote of all members of the board of supervisors and is subsequently
3approved by a two-thirds vote of the qualified voters of the county
4voting in an election on the issue.

5(2) (A) The transactions and use tax conforms to the
6 Transactions and Use Tax Law Part 1.6 (commencing with Section
77251).

8(B) Notwithstanding Section 7251.1, the tax rate authorized by
9this section shall not be considered for purposes of the combined
10rate established by that section.

11(3) The ordinance includes an expenditure plan describing the
12specific projects for which the revenues from the tax may be
13expended.

14(b) A county shall be deemed to be an authority for purposes
15of Chapter 1 (commencing with Section 55800) of Part 3 of
16Division 2 of Title 5 of the Government Code.

17

begin insert7294.6.end insert  

Notwithstanding any other law, the combined rate of
18all taxes imposed in any county pursuant to this article and
19pursuant to Article 2 (commencing with Section 7295) shall not
20exceed the rate of 5 percent.

21 

22Article begin insert2.end insert  Cities Medical Marijuana Tax
23

 

24

begin insert7295.end insert  

(a) Notwithstanding any other law, the governing body
25of any city may levy, increase, or extend a transactions and use
26tax for tangible personal property that is medical marijuana or
27medical marijuana-infused products for general purposes if the
28ordinance proposing that tax is approved by a two-thirds vote of
29all members of that governing body and the tax is approved by a
30majority vote of the qualified voters of the city voting in an election
31on the issue. The governing body may levy, increase, or extend
32more than one transactions and use tax under this section, if the
33adoption of each tax is in the manner prescribed in this section.

34(b) (1) The transactions and use tax shall conform to Part 1.6
35(commencing with Section 7251).

36(2) Notwithstanding Section 7251.1, the tax rate authorized by
37this section shall not be considered for purposes of the combined
38rate established by that section.

39

begin insert7295.5.end insert  

Notwithstanding any other law, the governing body of
40any city may levy, increase, or extend a transactions and use tax
P34   1for tangible personal property that is medical marijuana or medical
2marijuana-infused products for specific purposes. The tax may be
3levied, increased, or extended for the purpose for which it is
4established, if all of the following requirements are met:

5(a) The ordinance proposing that tax is approved by a two-thirds
6vote of all members of the governing body and is subsequently
7approved by a two-thirds vote of the qualified voters of the city
8voting in an election on the issue.

9(b) (1) The transactions and use tax conforms to the
10Transactions and Use Tax Law Part 1.6 (commencing with Section
117251).

12(2) Notwithstanding Section 7251.1, the tax rate authorized by
13this section shall not be considered for purposes of the combined
14rate established by that section.

15(c) The ordinance includes an expenditure plan describing the
16specific projects for which the revenues from the tax may be
17expended.

18

begin insert7295.6.end insert  

(a) The authority of a city to impose transactions and
19use taxes under Sections 7295 and 7295.5 shall not exceed the
20rate of 2 percent.

21(b) An ordinance proposing a tax shall contain a provision that
22any person subject to a transactions and use tax under a county
23ordinance shall be entitled to credit against the payment of taxes
24due under that ordinance in the amount of transactions and use
25tax due to any city in the county.

end insert
26begin insert

begin insertSEC. 10.end insert  

end insert
begin insert

The provisions of this act are severable. If any
27provision of this act or its application is held invalid, that invalidity
28shall not affect other provisions or applications that can be given
29effect without the invalid provision or application.

end insert
30begin insert

begin insertSEC. 11.end insert  

end insert
begin insert

The Legislature finds and declares that Section 3 of
31this act imposes a limitation on the public’s right of access to
32documents in the possession of a public agency within the meaning
33of Section 3 of Article I of the California Constitution. Pursuant
34to that constitutional provision, the Legislature makes the following
35finding to demonstrate the interest protected by this limitation and
36the need for protecting that interest:

end insert
begin insert

37It is necessary to maintain the confidentiality of patient and
38physician information provided to the Division of Medical
39Cannabis Regulation and Enforcement in order to protect the
40private medical information of patients who use medical cannabis
P35   1and to preserve the essential confidentiality of the physician and
2patient relationship.

end insert
3begin insert

begin insertSEC. 12.end insert  

end insert
begin insert

No reimbursement is required by this act pursuant
4to Section 6 of Article XIII B of the California Constitution because
5the only costs that may be incurred by a local agency or school
6district will be incurred because this act creates a new crime or
7infraction, eliminates a crime or infraction, or changes the penalty
8for a crime or infraction, within the meaning of Section 17556 of
9the Government Code, or changes the definition of a crime within
10the meaning of Section 6 of Article XIII B of the California
11Constitution.

end insert
begin delete12

SECTION 1.  

Section 653.3 is added to the Penal Code, to read:

13

653.3.  

Whoever files, attempts to file, or conspires to file, in
14any public record, or in any private record that is generally
15available to the public, any false lien or encumbrance against the
16real or personal property of an individual described in Chapter 4.5
17(commencing with Section 830) of Title 3 of Part 2, on account
18of the performance of the official duties of that person pursuant
19to that chapter, if the person filing, attempting to file, or conspiring
20to file the public or private record knows, or has reason to know,
21that the lien or encumbrance is false or contains any materially
22false, fictitious, or fraudulent statement or representation, is guilty
23of a misdemeanor.

end delete
begin delete
24

SEC. 2.  

No reimbursement is required by this act pursuant to
25Section 6 of Article XIII B of the California Constitution because
26the only costs that may be incurred by a local agency or school
27district will be incurred because this act creates a new crime or
28infraction, eliminates a crime or infraction, or changes the penalty
29for a crime or infraction, within the meaning of Section 17556 of
30the Government Code, or changes the definition of a crime within
31the meaning of Section 6 of Article XIII B of the California
32Constitution.

end delete


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