Amended in Senate April 21, 2014

Senate Bill No. 1262

Introduced by Senator Correa

February 21, 2014

An act to add Article 25 (commencing with Section 2525) to Chapter 5 of Division 2 of the Business and Professions Code, and to add Article 7 (commencing with Section 111657) to Chapter 6 of Part 5 of Division 104 of the Health and Safety Code, relating to medical marijuana.

LEGISLATIVE COUNSEL’S DIGEST

SB 1262, as amended, Correa. Medical marijuana: regulation of physicians, dispensaries, and cultivation sites.

(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 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 require the State Department of Public Health to license dispensing facilities and cultivation sites that provide, process, and grow marijuana for medical use, as specified, and would make these licenses subject to the restrictions of the local jurisdiction in which the facility operates or proposes to operate. The bill would require the department to establish standards for quality assurance testing of medical marijuana and would prohibit the use of nonorganic pesticides in any marijuana cultivation site. The bill would require licensed dispensing facilities and licensed cultivation sites to implement sufficient security measures to both deter and prevent unauthorized entrance into areas containing marijuana and theft of marijuana at those facilities, including establishing limited access areas accessible only to authorized facility personnel, and would require these facilities to notify appropriate law enforcement authorities within 24 hours after discovering specified breaches in security. begin insert The bill would require licensed dispensing facilities to verify that the recommending physician and surgeon is licensed to practice medicine in California before providing a marijuana product to a patient. This bill would prohibit the distribution of any form of advertising for physician recommendations for medical marijuana unless the advertisement bears a specified notice and requires that the advertisement meet specified requirements and not be fraudulent, deceitful, or misleading, as specified. end insert The bill would make enforcement of these provisions the responsibility of the county health departments, with oversight by the department. Violation of these provisions would be punishable by a civil fine of up to $35,000 for each individual violation. By expanding the duties of local health officers, this bill would impose a state-mandated local program.

(2) Existing law, the Medical Practice Act, provides for licensure and regulation of physicians and surgeons by the Medical Board of California.

This bill would establish requirements for a physician and surgeon to recommend medical marijuana, including prescribed procedural and recordkeeping requirements, and would require a recommendation for medical marijuana for a begin delete minor end delete begin insert person under 21 years of age end insert to include a specific justification for the recommendation and why the benefit of use is more important than the possible neurological damage that could be caused by the begin delete minor end delete begin insert person end insert using marijuana and to be approved by a board certified pediatrician. begin delete The bill would require a physician and surgeon that recommends medical marijuana to report to the board the number of recommendations issued, with supporting documentation on patient medical need. end delete

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This bill would require the board to audit a physician and surgeon who recommends medical marijuana more than 100 times in a year to ensure compliance with existing law and would require the board to establish a certification process for physicians who wish to issue medical marijuana recommendations, including a mandatory training in identifying signs of addiction and ongoing substance abuse.

end delete begin insert

This bill would require the board, by January 1, 2016, to convene a task force of experts in the use of medical marijuana to review and update, as necessary, guidelines for recommending medical marijuana, as specified.

end insert

Violation of these provisions would be punishable by a civil fine not to exceed $5,000 begin insert . The bill would make the recommendation of medical marijuana without a prior examination and medical indication and recommendation of medical marijuana for nonmedical purposes unprofessional conduct, to be punished as provided end insert . begin insert The bill would also make it a misdemeanor for a physician and surgeon who recommends marijuana to a patient for a medical purpose to accept, solicit, or offer any remuneration from or to a licensed dispensing facility in which the physician and surgeon or his or her immediate family has a financial interest. By creating a new crime, this bill would impose a state-mandated local program. end insert

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

end delete begin delete

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

end delete begin insert

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

end insert begin insert

This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason.

end insert begin insert

With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

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

SECTION 1.  

The Legislature finds and declares all of the
following:

(a) The California Constitution grants cities and counties the
authority to make and enforce, within their borders, “all local
police, sanitary, and other ordinances and regulations not in conflict
with the general laws.” This inherent local police power includes
broad authority to determine, for purposes of public health, safety,
and welfare, the appropriate uses of land within the local
jurisdiction’s borders. The police power, therefore, allows each
city and county to determine whether or not a medical marijuana
dispensary or other facility that makes medical marijuana available
may operate within its borders. This authority has been upheld by
City of Riverside v. Inland Empire Patients Health & Wellness,
Inc. (2013) 56 Cal.4th 729 and County of Los Angeles v. Hill
(2011) 192 Cal.App.4th 861.

(b) If, pursuant to this authority, a city or county determines
that a dispensary or other facility that makes medical marijuana
available may operate within its borders, then there is a need for
the state to license these dispensaries and other facilities for the
purpose of adopting and enforcing protocols for training and
certification of physicians who recommend the use of medical
marijuana and for agricultural cultivation practices. This licensing
requirement is not intended in any way nor shall it be construed
to preempt local ordinances regarding the sale and use of medical
marijuana, including, but not limited to, security, signage, lighting,
and inspections.

begin delete

(c) Given that the current system of all-cash transactions within
the medical marijuana industry is unsustainable in the long term,
there is a need to provide a monetary structure, as an alternative
to the federal banking system, for the operation, regulation, and
taxation of medical marijuana dispensaries.

end delete begin delete

(d)

end delete

begin insert (c) end insert  All of the following elements are necessary to uphold
important state goals:

(1) Strict provisions to prevent the potential diversion of
marijuana for recreational use.

(2) Audits to accurately track the volume of both product
movement and sales.

(3) An effective means of restricting access to medical marijuana
by begin delete minors, end delete begin insert persons under 21 years of age end insert begin delete given the medical studies
documenting marijuana’s harmful and permanent effects on the
brain development of youth end delete .

begin delete

(4) Stricter provisions relating to physicians and their
recommendation procedures in order to address widespread
problems of questionable medical marijuana recommendations by
physicians without a bona-fide doctor-patient relationship with
the person to whom they are issuing the recommendation.

end delete begin delete

(e)

end delete

begin insert (d) end insert  Nothing in this act shall be construed to promote or facilitate
the nonmedical, recreational possession, sale, or use of marijuana.

SEC. 2.  

Article 25 (commencing with Section 2525) is added
to Chapter 5 of Division 2 of the Business and Professions Code,
to read:

 

Article 25.  Recommending Medical Marijuana

 

2525.  

(a) Prior to recommending marijuana to a patient
pursuant to Article 2.5 (commencing with Section 11362.7) of
Chapter 6 of Division 10 of the Health and Safety Code, a
physician and surgeon shall meet all of the following requirements:

(1) Have a begin delete bona fide end delete doctor-patient begin delete relationship, with medical
marijuana recommendations to be made by a patient’s primary
care physician or by a physician and surgeon to whom the patient
is referred by their primary care physician end delete begin insert relationship end insert .

(2) Conduct an begin delete in-person end delete begin insert appropriate prior end insert examination begin insert of the
patient end insert to establish begin delete the patient’s need for medical marijuana end delete begin insert that
medical use of marijuana is appropriate end insert .

(3) Consult with the patient as necessary and periodically review
the treatment’s efficacy.

(b) A physician and surgeon that recommends medical marijuana
shall do all of the following:

(1)  begin delete Address, in the recommendation, the quantity of use and
method of delivery, including end delete begin insert Include end insert a discussion of side effects.
begin delete If the recommended method of delivery is smoking, the
recommendation shall state the reasons for selecting this method
of delivery in the context of health issues created by smoking. end delete

(2) Address, in the recommendation, what kind of marijuana to
obtain, including high tetrahydrocannabinol (THC) levels, low
THC levels, high cannabidiol (CBD) levels, low CBD levels, and
explain the reason for recommending the particular strain. Under
no circumstances shall a physician and surgeon recommend butane
hash oil.

(3) Maintain a system of recordkeeping that supports the
decision to recommend the use of medical marijuana for individual
patients.

(c) A recommendation for medical marijuana provided to a
begin delete minor end delete begin insert person under 21 years of age end insert shall begin delete include a specific
justification for the recommendation and why the benefit of use
is more important than the possible neurological damage that could
be caused by the minor using marijuana. A recommendation for
a minor shall end delete be approved by a board certified pediatrician. A
recommendation for a begin delete minor end delete begin insert person under 21 years of age end insert shall
be for high CBD marijuana and all recommendations for begin delete minors
must end delete begin insert persons under 21 years of age shall end insert be for nonsmoking
delivery.

begin delete

2525.1.  

(a) A physician and surgeon who recommends medical
marijuana shall report to the California Medical Board the number
of recommendations issued, with supporting documentation on
patient medical need. The board shall forward these reports to the
State Department of Public Health.

(b) A physician and surgeon who makes more than 100
recommendations in a calendar year shall be audited by the
California Medical Board to determine compliance with Article
2.5 (commencing with Section 11362.7) of Chapter 6 of Division
10 of the Health and Safety Code.

end delete begin delete

2525.2.  

The California Medical Board shall establish a
certification process for physicians who wish to issue medical
marijuana recommendations, including a mandatory training in
identifying signs of addiction and ongoing substance abuse.

end delete begin insert

begin insert 2525.1. end insert   

(a) It is unlawful for a physician and surgeon who
recommends marijuana to a patient for a medical purpose to
accept, solicit, or offer any form of remuneration from or to a
facility licensed pursuant to Article 7 (commencing with Section
111657) of Chapter 6 of Part 5 of Division 104 of the Health and
Safety Code if the physician and surgeon or his or her immediate
family have a financial interest in that facility.

(b) For the purposes of this section, “financial interest” shall
have the same meaning as in Section 650.01.

(c) A violation of this section shall be a misdemeanor.

end insert begin insert

begin insert 2525.2. end insert   

The board, by January 1, 2016, shall convene a task
force of experts in the use of medical marijuana to review and
update, as necessary, guidelines for recommending medical
marijuana to ensure competent review in cases concerning the
recommendation of marijuana for medical purposes.

end insert

2525.3.  

begin insert (a) end insert begin insert   end insert In addition to all other remedies available pursuant
to this chapter, violation of any provision of this article shall be
punishable by a civil fine of up to five thousand dollars ($5,000).

begin insert

(b) Recommending marijuana to a patient for a medical purpose
without an appropriate prior examination and a medical indication,
or recommending marijuana for a nonmedical purpose shall
constitute unprofessional conduct and may be punished pursuant
to Article 12 (commencing with Section 2220).

end insert

SEC. 3.  

Article 7 (commencing with Section 111657) is added
to Chapter 6 of Part 5 of Division 104 of the Health and Safety
Code, to read:

 

Article 7.  Medical Marijuana

 

111657.  

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

(a) “Department” means the State Department of Public Health.

(b) “Licensed cultivation site” means a facility that grows or
grows and processes marijuana for medical use and that is licensed
pursuant to Section 111657.1.

(c) “Licensed dispensing facility” means a dispensary, mobile
dispensary, marijuana processing facility, or other facility that
provides marijuana for medical use that is licensed pursuant to
Section 111657.1.

111657.1.  

(a) Except as provided in Section 11362.5 of, and
Article 2.5 (commencing with Section 11362.7) of Chapter 6 of
Division 10 of, the Health and Safety Code, a person shall not sell
or provide marijuana other than at a licensed dispensing facility.

(b) Except as provided in Section 11362.5 of, and Article 2.5
(commencing with Section 11362.7) of Chapter 6 of Division 10
of, the Health and Safety Code, a person shall not grow or process
marijuana other than at a licensed cultivation site.

(c) The department shall require, prior to issuing a license to a
dispensing facility or a cultivation site, all of the following:

(1) The name of the owner or owners of the proposed facility.

(2) The address and telephone number of the proposed facility.

(3) A description of the scope of business of the proposed
facility.

(4) A certified copy of the local jurisdiction’s approval to operate
within its borders.

(5) A completed application, as required by the department.

(6) Payment of a fee, in an amount to be determined by the
department not to exceed the amount necessary, but that is
sufficient to cover, the actual costs of the administration of this
article.

(7) Any other information as required by the department.

111657.2.  

The department shall, after consulting with outside
entities as needed, establish standards for quality assurance testing
of medical marijuana, to ensure protection against microbiological
contaminants. Nonorganic pesticides shall not be used in any
marijuana cultivation site, irrespective of size or location.

111657.3.  

(a) A licensed dispensing facility shall not acquire,
possess, cultivate, deliver, transfer, transport, or dispense marijuana
for any purpose other than those authorized by Article 2.5
(commencing with Section 11362.7) of Chapter 6 of Division 10.

(b) A licensed dispensing facility shall not acquire marijuana
plants or products except through the cultivation of marijuana by
that facility, if the facility is a licensed cultivation site, or another
licensed cultivation site.

begin insert

begin insert 111657.4. end insert   

A licensed dispensing facility shall not provide a
marijuana product to a patient until it verifies that the
recommending physician and surgeon is licensed to practice
medicine in California.

end insert begin insert

begin insert 111657.5. end insert   

(a) A person shall not distribute any form of
advertising for physician recommendations for medical marijuana
in California unless the advertisement bears the following notice
to consumers:

NOTICE TO CONSUMERS: The Compassionate Use Act of
1996 ensures that seriously ill Californians have the right to obtain
and use marijuana for medical purposes where 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. Physicians are licensed and regulated by
the Medical Board of California and arrive at the decision to make
this recommendation in accordance with accepted standards of
medical responsibility. California law prohibits advertising that
includes statements of bait, discount, premiums, gifts, or any
statements of a similar nature.

(b) Advertising for physician recommendations for medical
marijuana shall meet all requirements of Section 651 of the
Business and Professions Code. Price advertising shall not be
fraudulent, deceitful, or misleading, including statements or
advertisements of bait, discount, premiums, gifts, or statements of
a similar nature.

end insert

begin delete 111657.4. end delete
begin insert 111657.6. end insert   

(a) A facility licensed pursuant to this article shall
implement sufficient security measures to both deter and prevent
unauthorized entrance into areas containing marijuana and theft
of marijuana at those facilities. These security measures shall
include, but not be limited to, all of the following:

(1) Allow only registered qualifying patients, personal
caregivers, and facility agents access to the facility.

(2) Prevent individuals from remaining on the premises of the
facility if they are not engaging in activity expressly related to the
operations of the facility.

(3) Establish limited access areas accessible only to authorized
facility personnel.

(4) Store all finished marijuana in a secure, locked safe or vault
and in a manner as to prevent diversion, theft, and loss.

(b) A facility licensed pursuant to this article shall notify
appropriate law enforcement authorities within 24 hours after
discovering any of the following:

(1) Discrepancies identified during inventory.

(2) Diversion, theft, loss, or any criminal activity involving the
facility or a facility agent.

(3) The loss or unauthorized alteration of records related to
marijuana, registered qualifying patients, personal caregivers, or
facility agents.

(4) Any other breach of security.

(c) A licensed cultivation site shall weigh, inventory, and
account for on video, all medical marijuana to be transported prior
to its leaving its origination location. Within eight hours after
arrival at the destination, the licensed dispensing facility shall
re-weigh, re-inventory, and account for on video, all transported
marijuana.

begin delete 111657.5. end delete
begin insert 111657.7. end insert   

(a) Enforcement of this article shall be the
responsibility of the county health departments, with oversight by
the department.

(b) An enforcement officer may enter a facility licensed pursuant
to this article during the facility’s hours of operation and other
reasonable times to do either of the following:

(1) Conduct inspections, issue citations, and secure samples,
photographs, or other evidence from the facility, or a facility
suspected of being a dispensing facility or cultivation site.

(2) Secure as evidence documents, or copies of documents,
including inventories required pursuant to subdivision (c) of
Section begin delete 111657.4 end delete begin insert 111657.6 end insert , or any record, file, paper, process,
invoice, video, or receipt for the purpose of determining
compliance with this chapter.

(c) A written report shall be made and a copy shall be supplied
or mailed to the owner of the facility at the completion of an
inspection or investigation.

(d) Upon request by the department, local governments shall
provide the department with reports on the number and types of
facilities operating within their jurisdiction.

begin delete 111657.6. end delete
begin insert 111657.8. end insert   

In addition to the provisions of this article, a license
granted pursuant to this article shall be subject to the restrictions
of the local jurisdiction in which the facility operates or proposes
to operate. Even if a license has been granted pursuant to this
article, a facility shall not operate in a local jurisdiction that
prohibits the establishment of that type of business.

begin delete 111657.7. end delete
begin insert 111657.9. end insert   

Violation of this provision shall be punishable by a
civil fine of up to thirty-five thousand dollars ($35,000) for each
individual violation.

begin insert

begin insert 111657.10. end insert   

Nothing in this article shall prevent a city or other
local governing body from doing any of the following:

(a) Adopting and enforcing local ordinances that regulate the
location, operation, or establishment of medical marijuana
cooperatives or collectives.

(b) The civil and criminal enforcement of local ordinances
described in subdivision (a).

(c) Enacting other laws consistent with this article.

end insert

begin delete

SEC. 4.  

If the Commission on State Mandates determines that
this act contains costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.

end delete

begin insert

begin insert SEC. 4. end insert   

end insert begin insert

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution for certain
costs that may be incurred by a local agency or school district
because, in that regard, 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.

end insert begin insert

However, if the Commission on State Mandates determines that
this act contains other costs mandated by the state, reimbursement
to local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.

end insert