Amended in Senate May 27, 2014

Amended in Senate May 7, 2014

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 begin insert of, and to add Part 5 (commencing with Section 18100) to Division 7 end insert of begin insert , end insert the Business and Professions Code, begin delete and to add Article 7 (commencing with Section 111657) to Chapter 6 of Part 5 of Division 104 of the Health and Safety Code, end delete 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. begin insert Existing law provides for the licensure of various professions, including locksmiths and professional fiduciaries, by the Department of Consumer Affairs. end insert

This bill would require the begin delete State end delete Department of begin delete Public Health end delete begin insert Consumer Affairs end insert to license dispensing facilities and cultivation sites that provide, process, and grow marijuana for medical use, as specified, including requiring a background check for license applicants, 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 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. 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. Violation of these provisions would be punishable by a civil fine of up to $35,000 for each individual violation.

(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 require the board to consult with the Center for Medical Cannabis Research on developing and adopting medical guidelines for the appropriate administration and use of marijuana.

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.

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

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

Vote: majority. Appropriation: no. 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.

(c) 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 persons under 21 years of age.

(d) 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) 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.

2525.1.  

The board shall consult with the California Marijuana
Research Program, known as the Center for Medicinal Cannabis
Research, authorized pursuant to Section 11362.9 of the Health
and Safety Code, on developing and adopting medical guidelines
for the appropriate administration and use of marijuana.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Part 5 (commencing with Section 18100) is added to
Division 7 of the end insert begin insert Business and Professions Code end insert begin insert , to read: end insert

begin insert

 

PART  begin insert 5. end insert   Medical Marijuana

 

begin insert 18100. end insert   

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

(a) “Department” means the Department of Consumer Affairs.

(b) “Licensed cultivation site” means a facility that grows or
grows and processes marijuana for medical use and that is licensed
pursuant to Section 18101.

(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 18101.

begin insert 18101. end insert   

(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
part.

(7) (A) An applicant’s fingerprint images and related
information required by the Department of Justice for the purpose
of obtaining information as to the existence and content of a record
of state and federal convictions and arrests, and information as
to the existence and content of a record of state and federal
convictions and arrests for which the Department of Justice
establishes that the person is free on bail, or on his or her own
recognizance, pending trial or appeal.

(B) The Department of Justice shall forward the fingerprint
images and related information received pursuant to subparagraph
(A) to the Federal Bureau of Investigation and request a federal
summary of criminal information. The Department of Justice shall
review the information returned from the Federal Bureau of
Investigation and compile and disseminate a response to the
department.

(C) The Department of Justice shall charge a fee sufficient to
cover the reasonable cost of processing the requests described in
this paragraph.

(D) The department may deny a license based on a past criminal
conviction if the crime is substantially related to the qualifications,
functions, or duties of the business for which the license will be
issued.

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

begin insert 18102. end insert   

(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 of the Health and Safety Code.

(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 18103. 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.

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

begin insert 18104. end insert   

(a) A facility licensed pursuant to this part 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 qualifying patients, the patient’s primary
caregiver, 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 part 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 reweigh, reinventory, and account for on video, all
transported marijuana.

begin insert 18105. end insert   

In addition to the provisions of this part, a license
granted pursuant to this part 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 part,
a facility shall not operate in a local jurisdiction that prohibits the
establishment of that type of business.

begin insert 18106. end insert   

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

begin insert 18107. end insert   

Nothing in this part shall prevent a city or other local
governing body from taking action as specified in Section 11362.83
of the Health and Safety Code.

end insert

begin delete

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) (A) An applicant’s fingerprint images and related
information required by the Department of Justice for the purpose
of obtaining information as to the existence and content of a record
of state and federal convictions and arrests and information as to
the existence and content of a record of state and federal
convictions and arrests for which the Department of Justice
establishes that the person is free on bail, or on his or her own
recognizance, pending trial or appeal.

(B) The Department of Justice shall forward the fingerprint
images and related information received pursuant to subparagraph
(A) to the Federal Bureau of Investigation and request a federal
summary of criminal information. The Department of Justice shall
review the information returned from the Federal Bureau of
Investigation and compile and disseminate a response to the
department.

(C) The Department of Justice shall charge a fee sufficient to
cover the reasonable cost of processing the requests described in
this paragraph.

(D) The department may deny a license based on a past criminal
conviction if the crime is substantially related to the qualifications,
functions, or duties of the business for which the license will be
issued.

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

111657.2.  

(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.

111657.3.  

(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.

(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.

111657.4.  

(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 qualifying patients, the patient’s primary
caregiver, 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.

111657.5.  

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.

111657.6.  

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

111657.7.  

Nothing in this article shall prevent a city or other
local governing body from taking action as specified in Section
11362.83.

end delete

SEC. 4.  

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