Amended in Assembly July 2, 2014

Amended in Assembly June 15, 2014

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

begin insert

(Principal coauthor: Assembly Member Ammiano)

end insert

February 21, 2014

An act to amend Section 2220.05 of, to add Article 25 (commencing with Section 2525) to Chapter 5 of Division 2 of, and to add Part 5 (commencing with Section 18100) to Division 7 of, the Business and Professions Code, begin insert to add Section 23028 to the Government Code, and end insert to add Article 8 (commencing with Section 111658) to Chapter 6 of Part 5 of Division 104 of the Health and Safety Code, begin delete and to add Chapter 3.8 (commencing with Section 7295) to Part 1.7 of Division 2 of the Revenue and Taxation Code, end delete relating to medical marijuana begin insert , and making an appropriation therefor end insert .

LEGISLATIVE COUNSEL’S DIGEST

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

(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. Existing law provides for the licensure of various professions by the Department of Consumer Affairs. Existing law, the Sherman Food, Drug, and Cosmetic Law, provides for the regulation of food, drugs, devices, and cosmetics, as specified. A violation of that law is a crime.

This bill would begin delete require end delete begin insert establish within end insert the Department of Consumer Affairs begin insert a Bureau of Medical Marijuana Regulation end insert to license dispensing facilities, cultivation sites, and processing facilities that provide, process, and grow marijuana for medical use, as specified, begin delete including requiring end delete begin insert subject to local ordinances. The bill would require end insert a background check begin delete for license end delete begin insert of end insert applicants begin insert for licensure to be administered by the Department of Justice end insert . The bill would make these licenses subject to the restrictions of the local jurisdiction in which the facility operates or proposes to operate. The bill would, among other things, require licensees to implement sufficient security measures to both deter and prevent unauthorized entrance into areas containing marijuana and theft of marijuana at their facilities, including establishing limited access areas accessible only to authorized facility personnel, and would require these licensees to notify appropriate law enforcement authorities within 24 hours after discovering specified breaches in security. The bill would set forth provisions related to the transportation, testing, and distribution of marijuana. begin insert The bill would set forth provisions for the revocation or suspension of a license for a violation of these provisions or of local ordinances, and would require the bureau to make recommendations to the Legislature pertaining to the establishment of a judicial review process. end insert The 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 begin insert , or as otherwise specified end insert .

begin insert

The bill would establish the Medical Marijuana Regulation Fund and would require the deposit of fees collected pursuant to this act into the fund. The bill would continuously appropriate moneys from the fund to the bureau for the purposes of administering this act, thereby making an appropriation. The bill would require the deposit of penalty moneys collected pursuant to this act into the General Fund.

end insert

The bill would provide that it shall not supersede provisions of Measure D, as approved by the voters of the City of Los Angeles, as specified.

The bill would require the begin delete department end delete begin insert bureau end insert to administer and enforce these provisions. The bill would require the begin delete department end delete begin insert bureau end insert to establish quality assurance protocols by July 1, 2016, to ensure uniform testing standards of medical marijuana, and would require licensees to comply with these provisions. The bill would further set forth provisions regulating edible marijuana products, as specified. By adding these provisions to the Sherman Food, Drug, and Cosmetic Law, a violation of which is a crime, the bill would impose a state-mandated local program.

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

This bill would require the board to consult with the Center for Medicinal 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, begin delete this end delete begin insert the end insert bill would impose a state-mandated local program.

The bill would provide that specified acts of recommending marijuana without a good faith examination are among the types of cases that should be given priority for investigation and prosecution by the board, as described above. The bill would further prohibit a begin delete person end delete begin insert physician and surgeon end insert from recommending medical marijuana to a patient unless that person is the patient’s attending physician, as defined. Because a violation of that provision would be a crime, the bill would impose a state-mandated local program.

(3) Existing law authorizes the legislative body of a city or county to impose various taxes, including a transactions and use tax at a rate of 0.25%, or a multiple thereof, if approved by the required vote of the legislative 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%.

This bill would authorize the begin delete legislative body end delete begin insert board of supervisors end insert of a county to begin delete levy end delete begin insert impose end insert a tax on the privilege of cultivating, dispensing, producing, processing, preparing, storing, providing, begin insert donating, selling, end insert or distributing marijuana or products containing marijuana. The bill would authorize the tax to be imposed for either general or specific governmental purposes. The bill would require a tax imposed pursuant to this authority to be subject to any applicable voter approval requirement.

begin insert (4) end insert begin insert   end insert begin insert This bill would provide that its provisions are severable. end insert

begin insert

(5) Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

end insert

begin insert This bill would make legislative findings to that effect. end insert

begin delete

The

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begin insert (6) end insert begin insert   end insert begin insert The end insert 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 delete no end delete begin insert yes end insert . 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) In 1996, the people of the State of California enacted the
Compassionate Use Act of 1996, codified in Section 11362.5 of
the Health and Safety Code. The people of the State of California
declared that their purpose in enacting the measure was, among
other things, “to ensure that seriously ill Californians have the
right to obtain and use marijuana for medical purposes where that
medical use is deemed appropriate and has been recommended by
a physician who has determined that the person’s health would
benefit from the use of marijuana in the treatment of cancer,
anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis,
migraine, or any other illness for which marijuana provides relief.”

(b) The Compassionate Use Act of 1996 called on state
government to implement a plan for the safe and affordable
distribution of marijuana to all patients in medical need of
marijuana begin insert , while ensuring that nothing in this act shall be
construed to condone the diversion of marijuana for nonmedical
purposes end insert .

(c) In 2003, the Legislature enacted the Medical Marijuana
Program Act (MMPA), codified in Article 2.5 (commencing with
Section 11362.7) of Chapter 6 of Division 10 of the Health and
Safety Code.

(d) Greater certainty and minimum statewide standards are
urgently needed regarding the obligations of medical marijuana
facilities, and for the imposition and enforcement of regulations
to prevent unlawful cultivation and the diversion of marijuana to
nonmedical use.

(e) Despite the passage of the Compassionate Use Act of 1996
and the MMPA, because of the lack of an effective statewide
system for regulating and controlling medical marijuana, cities,
counties and local law enforcement officials have been confronted
with uncertainty about the legality of some medical marijuana
cultivation and distribution activities. The current begin delete system of
collectives and cooperatives end delete begin insert state of affairs end insert makes law enforcement
difficult and endangers patient safety because of an inability to
monitor the supply of medical marijuana in the state and the lack
of quality control, testing, and labeling requirements.

(f) 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. begin insert Nothing in this act shall diminish,
erode, or modify that authority. end insert

(g) 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 begin insert , regulations, or enforcement actions end insert
regarding the sale and use of medical marijuana, including, but
not limited to, security, signage, lighting, and inspections.

(h) 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 begin insert nonmedical end insert access to
medical marijuana by minors.

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

SEC. 2.  

Section 2220.05 of the Business and Professions Code
is amended to read:

2220.05.  

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

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

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

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

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

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

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

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

SEC. 3.  

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 Part 5 (commencing with Section 18100) of
Division 7, 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.

2525.2.  

begin delete No person end delete begin insert A physician and surgeon end insert begin insert end insert shall begin insert not end insert
recommend medical marijuana to a patient, unless that person is
the patient’s attending physician, as defined by subdivision (a) of
Section 11362.7 of the Health and Safety Code.

SEC. 4.  

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

 

PART 5.  Medical Marijuana

 

18100.  

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

begin delete

(a) “Certified testing laboratory” means a laboratory that is
certified by the department to perform random sample testing of
marijuana pursuant to the certification standards for these facilities
promulgated by the department.

end delete begin delete

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

end delete begin delete

(c) “Dispensary” means a distribution operation that provides
marijuana or marijuana derived products to patients.

end delete begin delete

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

end delete begin delete

(e) “Licensed dispensing facility” means a dispensary or other
facility that provides marijuana for medical use that is licensed
pursuant to Section 18101.

end delete begin delete

(f) “Licensed processing facility” means a facility where
marijuana or marijuana products are inspected, packaged, labeled,
or otherwise prepared prior to being provided to another facility
licensed pursuant to this section, to a patient with a medical
marijuana recommendation, or otherwise distributed, and that is
licensed pursuant to Section 18101.

end delete begin delete

(g) “Licensed transporter” means an individual or entity licensed
by the department to transport marijuana to and from facilities
licensed pursuant to this part.

end delete begin delete

(h) “Marijuana” means marijuana, as defined by Section 11018
of the Health and Safety Code.

end delete begin insert

(a) “Bureau” means the Bureau of Medical Marijuana
Regulation in the Department of Consumer Affairs.

end insert begin insert

(b) “Certified testing laboratory” means a laboratory that is
certified by the bureau to perform random sample testing of
marijuana pursuant to the certification standards for these facilities
promulgated by the bureau.

end insert begin insert

(c) “Dispensary” means a distribution operation that provides
marijuana or marijuana derived products to patients.

end insert begin insert

(d) “Fund” means the Medical Marijuana Regulation Fund
established pursuant to Section 18101.4.

end insert begin insert

(e) “Licensed cultivation site” means a facility that grows
marijuana for medical use and that is licensed pursuant to this
part.

end insert begin insert

(f) “Licensed dispensing facility” means a dispensary or other
facility that provides marijuana for medical use that is licensed
pursuant to this part.

end insert begin insert

(g) “Licensed processing facility” means a facility where
marijuana or marijuana products are inspected, packaged, labeled,
or otherwise prepared, warehoused, or stored prior to being
provided to another facility licensed pursuant to this part, to a
patient with a medical marijuana recommendation, or otherwise
distributed, and that is licensed pursuant to this part.

end insert begin insert

(h) “Licensed transporter” means an individual or entity
licensed by the bureau to transport marijuana to and from facilities
licensed pursuant to this part.

end insert begin insert

(i) “Marijuana” means all parts of the plant Cannabis sativa,
cannabis indica, or cannabis ruderalis, whether growing or not;
the seeds thereof; the resin, whether crude or purified, extracted
from any part of the plant; and every compound, manufacture,
salt, derivative, mixture, or preparation of the plant, its seeds, or
resin. ”Marijuana” does not include the mature stalks of the plant,
fiber produced from the stalks, oil or cake made from the seeds of
the plant, any other compound, manufacture, salt, derivative,
mixture, or preparation of the mature stalks (except the resin
extracted therefrom), fiber, oil, or cake, or the sterilized seed of
the plant which is incapable of germination. “Marijuana” also
means marijuana, as defined by Section 11018 of the Health and
Safety Code.

end insert

begin delete

18101.  

(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 marijuana
other than at a licensed cultivation site.

(c) 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 process
marijuana other than at a licensed processing facility.

(d) A person shall not transport marijuana from one facility
licensed pursuant to this part to another, other than a licensed
transporter.

(e) To meet the requirement of Sections 111658 to 111663,
inclusive, of the Health and Safety Code, marijuana and marijuana
products shall be tested by a certified testing laboratory.

(f) The department shall require, prior to issuing a license to a
dispensing facility or a cultivation site pursuant to this part, 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) In the case of a cultivation site, the GPS coordinates of the
site.

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

(g) The department shall deny a license if the application fails
to state with sufficient specificity the jurisdiction in which the
applicant proposes to establish operations.

(h) Each application for a license approved by the department
pursuant to this part is separate and distinct. A licensee shall not
hold a license in more than one class of specified medical
marijuana activities. A licensee shall not be an officer, director,
member, owner, or shareholder in another entity licensed pursuant
to this part. The officers, directors, owners, members, or
shareholders of a licensee in one class may not hold a license in
another class, and may not be an officer, director, member, owner,
or shareholder of an entity licensed pursuant to this part.

end delete begin insert

begin insert 18101. end insert   

(a) (1) There is hereby created in the Department of
Consumer Affairs the Bureau of Medical Marijuana Regulation.
The bureau shall be administered by an executive officer who shall
be a civil servant appointed pursuant to civil service rules by the
Governor, and who shall be known as the Executive Officer of the
Bureau of Medical Marijuana Regulation.

(2) Funds for the establishment and support of the bureau shall
be advanced as a loan by the Department of Consumer Affairs and
shall be repaid by the initial proceeds from fees collected pursuant
to subdivision (b) of Section 18101.1, paragraph (9) of subdivision
(f) of Section 18101.2, and subdivision (b) of Section 18101.3.

(b) (1) The bureau shall have the power to license persons for
the cultivation, manufacture, transportation, storage, distribution,
and sale of medical marijuana within the state and to collect
licensing fees in connection with these actions.

(2) The bureau shall exercise its authority pursuant to
paragraph (1) consistent with subdivision (f) of Section 1 of the
act that added this section and consistent with the provisions of
this part.

end insert begin insert

begin insert 18101.1. end insert   

The bureau shall have the authority, subject to local
ordinances, to license persons for the cultivation, manufacture,
transportation, storage, and sale of medical marijuana within the
state, and to levy appropriate related licensing fees not to exceed
the reasonable costs of enforcement and administration of this
part. The bureau shall not issue a license if the applicant has not
met all requirements pursuant to this part. A license, once issued,
shall be suspended within 10 days of notification to the bureau by
a local agency that a licensee is no longer in compliance with any
local ordinance or regulation. The bureau shall have the power
necessary for the administration of this part, including, but not
limited to, the following:

(a) Establishing statewide minimum standards for the
cultivation, manufacturing, transportation, storage, distribution,
provision, donation, and sale of medical marijuana and medical
marijuana products, and procedures for the issuance, renewal,
suspension, and revocation of licenses.

(b) Establishing a scale of application, license, and renewal
fees, to be imposed by the state, for licenses for the cultivation,
manufacturing, transportation, distribution, and sale of medical
marijuana and medical marijuana products. The bureau may
charge separate fees for each license application for cultivation,
manufacturing, transportation, distribution, and sale. The total
fees imposed pursuant to this part shall be based on the actual
costs of administering and enforcing this part.

(c) Making and proscribing any rule that may be necessary or
proper to carry out the purposes and intent of this part and to
enable it to exercise the powers and perform the duties conferred
upon it by this part and in accordance with Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code. For the performance of its duties, the
bureau has the powers as set forth in Article 2 (commencing with
Section 11180) of Chapter 2 of Part 1 of Division 3 of Title 2 of
the Government Code.

(d) Approving or denying applications, subject to local
ordinances, for cultivation, manufacturing, labeling,
transportation, distribution, provision, donation, and sale of
medical marijuana pursuant to this part.

(e) The bureau shall, with input from local agencies, deny,
suspend, or revoke any license issued pursuant to this part, or fine
any licensee, if the bureau determines that the granting or
continuance of the license would be contrary to public welfare or
morals or that a person holding or seeking a license has violated
any law prohibiting conduct involving moral turpitude or an
applicable local ordinance.

(f) Imposing any penalty authorized by this part or any rule or
regulation adopted pursuant to this part.

(g) Taking any action with respect to a license application in
accordance with procedures established pursuant to this part.

(h) The bureau shall make recommendations to the Legislature
pertaining to the establishment of an appeals and judicial review
process for persons aggrieved by a final decision of the bureau.

(i) Developing any forms, identification certificates, and
applications that are necessary or convenient in the discretion of
the bureau for the administration of this part or any of the rules
or regulations adopted pursuant to this part.

(j) Overseeing the operation of the Medical Marijuana
Regulation Fund established pursuant to Section 18101.4.

(k) Establishing reasonable fees for processing all applications,
licenses, notices, or reports required to be submitted to the bureau.
The amount of the fees shall reflect, but shall not exceed, the direct
and indirect costs of the bureau for the administration of this part
and the rules or regulations adopted pursuant to this part.

(l) The bureau may consult with other state agencies,
departments, or public or private entities for the purposes of
establishing statewide standards and regulations.

end insert begin insert

begin insert 18101.2. 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 marijuana
other than at a licensed cultivation site.

(c) 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 process
marijuana other than at a licensed processing facility.

(d) A person shall not transport marijuana from one facility
licensed pursuant to this part to another, other than a licensed
transporter.

(e) To meet the requirements of Article 8 (commencing with
Section 111658) of Chapter 6 of Part 5 of Division 104 of the
Health and Safety Code, marijuana and marijuana products shall
be tested by a certified testing laboratory.

(f) The bureau shall require, prior to issuing a license pursuant
to this part, all of the following:

(1) The name of the owner or owners of a proposed facility,
including all persons or entities having an ownership interest other
than a security interest, lien, or encumbrance on any property that
will be used by the applicant.

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

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

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

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

(6) Operating and inventory control procedures to ensure
security and prevent diversion.

(7) Detailed operating procedures for the proposed facility,
which shall include, but not be limited to, provisions for facility
and operational security, prevention of diversion, employee
screening, storage of medical marijuana, personnel policies, and
recordkeeping procedures.

(8) A completed application, as required by the bureau.

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

(10) (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 charge a fee sufficient to
cover the reasonable cost of processing the requests described in
the paragraph.

(11) In the case of a cultivation site, the GPS coordinates of the
site.

(12) Any other information as required by the bureau.

(13) The bureau shall deny a license based on a past felony
criminal conviction for drug trafficking, a felony conviction for
embezzlement, a felony conviction involving fraud or deceit, or
any violent or serious felony conviction pursuant to subdivision
(c) of Section 667.5 of, or subdivision (c) of Section 1192.7 of, the
Penal Code. The bureau may also deny a license based on a past
criminal conviction if the crime was substantially related to the
qualifications, functions, or duties of the business for which the
license will be issued.

(g) The bureau shall deny a license if the application fails to
state with sufficient specificity the jurisdiction in which the
applicant proposes to establish operations.

(h) (1) Each application for a license approved by the bureau
pursuant to this part is separate and distinct, and the bureau may
charge a separate fee for each. A licensee shall not hold a license
in more than one class of specified medical marijuana activities,
except that a licensee may have a transporter license in addition
to a license to cultivate, process, or dispense medical marijuana.

(2) A licensee shall not be an officer, director, member, owner,
or shareholder in another entity licensed pursuant to this part.
The officers, directors, owners, members, or shareholders of a
licensee in one class of license may not hold a license in another
class, and may not be an officer, director, member, owner, or
shareholder of an entity licensed pursuant to this part.

end insert begin insert

begin insert 18101.3. end insert   

Beginning January 1, 2015, the bureau shall provide
for provisional licenses, as follows:

(a) The bureau shall request that every city, county, or city and
county provide the bureau with a list of approved entities providing
medical marijuana to qualified patients and caregivers within the
city’s, county’s, or city and county’s jurisdiction, if any, the
location at which the entity is operating, and the names of the
persons who operate the entity.

(1) If the jurisdiction represents that the entity has been
operating in compliance with local laws and regulations, or has
limited immunity under local laws, including, but not limited to,
Measure D, approved by the voters of the City of Los Angeles at
the May 21, 2013, general election, the bureau shall issue a
provisional license to the entity until the time that the entity’s
application for a license has been approved or denied under this
part, but no later than 90 days after the bureau begins accepting
applications for licenses.

(2) The bureau shall consult with relevant local agencies in
making a determination on whether a provisional license applicant
is in compliance with any applicable ordinance. The bureau shall
issue a provisional license to an individual or entity once the
bureau has obtained confirmation from the relevant local agency
that the six months prior to January 1, 2015, the applicant was
regularly cultivating or distributing medical marijuana collectively
or cooperatively in full compliance with any applicable local
ordinance. The bureau shall continue to issue provisional licenses
until such time as the licensee’s application for a standard license
has been approved or denied under this part, but no later than 90
days after the bureau begins accepting applications. To qualify
for a provisional license, an applicant shall be required to disclose
to the bureau the following information in writing on or before
January 20, 2015, in order to obtain provisional licensure:

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

(B) The common street address and assessor’s parcel number
of the property at which the applicant will conduct any activity
under the authority of the license.

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

(D) For the six months prior to January 1, 2015, the quantity
of medical marijuana cultivated at a location and the quantity
expected to be cultivated from January 1, 2015, to June 30, 2015,
inclusive. The applicant shall make its records of current activity
and activity for the six months prior to January 1, 2015, available
to the bureau upon request.

(b) The bureau shall charge an application fee of eight thousand
dollars ($8,000) for each provisional license.

(c) Notwithstanding any other provision of this section, the
bureau shall not issue a provisional license to any individual or
entity, or for any premises, against whom there are pending state
or local administrative or judicial proceedings or actions initiated
by a city, county, or city and county under any applicable local
ordinance or who has been determined through those proceedings
to have violated any applicable local ordinance.

end insert begin insert

begin insert 18101.35. end insert   

Beginning July 1, 2016, the bureau shall provide
for standard licenses as follows:

(a) The bureau shall request that every city, county, or city and
county provide the bureau with a list of approved entities providing
medical marijuana to qualified patients and caregivers within the
city’s, county’s, or city and county’s jurisdiction, if any, the
location at which the entity is operating, and the names of the
persons who operate the entity.

(b) If the jurisdiction represents that the entity has been
operating in compliance with local laws and regulations, or has
limited immunity under local laws, including, but not limited to,
Measure D, approved by the voters of the City of Los Angeles at
the May 21, 2013, general election, the bureau shall issue a license
to the entity if it meets the licensing requirements of this part.

(c) The bureau shall consult with relevant local agencies in
making a determination as to whether a standard license applicant
is in compliance with local ordinances. The bureau shall issue a
standard license only after it has obtained confirmation from the
relevant local agency that the applicant has satisfied all local
permitting requirements for cultivating or distributing medical
marijuana in compliance with local ordinances, and fulfilled all
other requirements under this part.

(d) The bureau shall charge an application fee of eight thousand
dollars ($8,000) for each standard license.

end insert begin insert

begin insert 18101.4. end insert   

(a) The Medical Marijuana Regulation Fund is
hereby established within the State Treasury. Notwithstanding
Section 16305.7 of the Government Code, the fund shall include
any interest and dividends earned on the money in the fund.

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

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

(d) The bureau may establish and administer a grant program
to allocate moneys from the Medical Marijuana Regulation Fund
to state and local entities for the purpose of assisting with medical
marijuana regulation and the enforcement of this part and other
state and local laws applicable to licensees.

end insert

18102.  

(a) A facility licensed pursuant to this part shall not
acquire, cultivate, process, possess, store, manufacture, begin delete test, end delete
distribute, sell, 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, cultivate,
process, possess, store, manufacture, begin delete test, end delete distribute, sell, deliver,
transfer, transport, or dispense marijuana plants or marijuana
products except through a licensed cultivation site or processing
facility.

18103.  

(a) A licensed transporter shall ship only to facilities
licensed pursuant to this part and only in response to a request for
a specific quantity and variety from those facilities.

(b) Prior to transporting any medical marijuana product, a
licensed transporter shall do the following:

(1) Complete a shipping manifest using a form prescribed by
the begin delete department. end delete begin insert bureau. end insert

(2) Securely transmit a copy of the manifest to the licensee that
will receive the medical marijuana product, and to the begin delete department, end delete
begin insert bureau, end insert prior to transport.

(c) The licensed transporter making the shipment and the
licensee receiving the shipment shall maintain each shipping
manifest and make it available to local code enforcement officers,
any other locally designated enforcement entity, and the begin delete department end delete
begin insert bureau end insert upon request.

18104.  

(a) Transported medical marijuana products shall:

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

(2) Not be visible from outside the vehicle.

(b) Any vehicle transporting medical marijuana products shall
travel directly from one licensed facility to another licensed facility
authorized to receive the shipment.

18105.  

(a) All transport vehicles shall be staffed with a
minimum of two employees. At least one transport team member
shall remain with the vehicle at all times that the vehicle contains
medical marijuana.

(b) Each transport team member shall have access to a secure
form of communication by which each member can communicate
with personnel at the licensed facility at all times that the vehicle
contains medical marijuana.

(c) Each transport team member shall possess documentation
of licensing and a government-issued identification card at all
times when transporting or delivering medical marijuana and shall
produce it to any representative of the department or law
enforcement official upon request.

(d) This part shall not be construed to authorize or permit any
licensee to transport, or cause to be transported, marijuana or
marijuana products outside the state.

begin insert

begin insert 18105.5. end insert   

A local jurisdiction shall not prevent transportation
through or to a licensed entity by a licensed transporter who acts
in compliance with this part.

end insert begin delete

18106.  

(a) The department shall have the authority, subject to
local ordinances, to license persons for the cultivation,
manufacture, testing, transportation, storage, and sale of medical
marijuana within the state, and to levy appropriate related licensing
fees not to exceed the reasonable costs of enforcement and
administration of this part. The department shall not issue a license
if the applicant has not met all requirements pursuant to Section
18101. A license, once issued, shall be suspended within five days
of notification to the department by a local agency that a licensee
is no longer in compliance with local ordinances or regulation.

(b)

end delete

begin insert

begin insert 18106. end insert   

end insert

begin insert (a) end insert  The begin delete department end delete begin insert bureau end insert shall promulgate, by July
1, 2016, regulations for implementation and enforcement of this
part, including all of the following:

(1) Procedures for the issuance, renewal, suspension, and
revocation of licenses.

(2) Application, licensing, and renewal forms and fees.

(3) A time period in which the begin delete department end delete begin insert bureau end insert shall approve
or deny an application for a license to operate a facility or
dispensary.

(4) Qualifications for licensees.

(5) Standards for certification of testing laboratories to perform
random sample testing of all marijuana products intended for sale,
to identify and eliminate chemical residue, microbiological
contaminants, and mold.

begin insert

(6) Requirements to ensure conformance with standards
analogous to state statutory environmental, agricultural, consumer
protection, and food and product safety requirements. At a
minimum, these standards shall do all of the following:

end insert begin insert

(A) Prescribe sanitation standards analogous to the California
Retail Food Code (Part 7 (commencing with Section 113700) of
Division 104 of the Health and Safety Code) for food preparation,
storage, and handling and sale of edible marijuana products.

end insert begin insert

(B) Require that edible marijuana products produced,
distributed, provided, donated, or sold by licensees shall be limited
to nonpotentially hazardous food as established by the State
Department of Public Health pursuant to Section 114365.5 of
Health and Safety Code.

end insert begin insert

(C) Provide standards for labeling edible marijuana products
to ensure that the products cannot be mistaken as food not
containing marijuana.

end insert begin insert

(D) Require that facilities in which edible marijuana products
are prepared shall be constructed in accordance with applicable
building standards, health and safety standards, and other state
laws.

end insert begin insert

(E) Provide that any weighing or measuring devices used in
connection with the sale or distribution of marijuana are required
to meet standards analogous to Division 5 (commencing with
Section 12001).

end insert begin insert

(F) Require that any application of pesticides or other pest
control in connection with the indoor or outdoor cultivation of
marijuana shall meet standards analogous to Division 6
(commencing with Section 11401) of the Food and Agricultural
Code and its implementing regulations.

end insert begin delete

(c)

end delete

begin insert (b) end insert  The begin delete department end delete begin insert bureau end insert shall promulgate, by July 1, 2016,
regulations for minimum statewide health and safety standards
and quality assurance standards pursuant to Section 111658 of the
Health and Safety Code associated with the cultivation, transport,
storage, and sale of all medical marijuana produced in this state.
Local agencies shall have primary responsibility for enforcement
of these standards in accordance with begin delete department end delete begin insert bureau end insert
regulations.

begin delete

(d)

end delete

begin insert (c) end insert  An application for or renewal of a license shall not be
approved if the begin delete department end delete begin insert bureau end insert determines any of the following:

(1) The applicant fails to meet the requirements of this part or
any regulation adopted pursuant to this part or any applicable begin delete city
or end delete begin insert city end insert county begin insert , or city and county end insert ordinance or regulation.

(2) The applicant, or any of its officers, directors, owners,
members, or shareholders is a minor.

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

(4) The applicant, or any of its officers, directors, owners,
members, or shareholders has been sanctioned by the begin delete department, end delete
begin insert bureau, end insert a city, county, or city and county, for marijuana activities
conducted in violation of this part or any applicable local ordinance
or has had a license revoked in the previous five years.

(5) The proposed cultivation, processing, possession, storage,
manufacturing, testing, transporting, distribution, provision, or
sale of medical marijuana will violate any applicable local law or
ordinance.

begin insert

(6) (A) The bureau shall deny an application for a license if
issuance of that license would tend to create a law enforcement
problem, or if issuance would result in or add to an undue
concentration of licenses.

end insert begin insert

(B) For purposes of this paragraph, the following definitions
shall apply:

end insert begin insert

(i) “Population within the census tract or census division”
means the population as determined by the most recent United
States decennial or special census. The population determination
shall not operate to prevent an applicant from establishing that
an increase of resident population has occurred within the census
tract or census division.

end insert begin insert

(ii) “Reported crimes” means the most recent yearly compilation
by the local law enforcement agency of reported offenses of
criminal homicide, forcible rape, robbery, aggravated assault,
burglary, larceny, theft, and motor vehicle theft, combined with
all arrests for other crimes, both felonies and misdemeanors, except
traffic citations.

end insert begin insert

(iii) “Reporting districts” means geographical areas within the
boundaries of a single governmental entity (city or the
unincorporated area of a county) that are identified by the local
law enforcement agency in the compilation and maintenance of
statistical information on reported crimes and arrests.

end insert begin insert

(iv) “Undue concentration” means:

end insert begin insert

(I) The applicant premises are located in a crime reporting
district that has a 20 percent greater number of reported crimes
than the average number of reported crimes as determined from
all crime reporting districts within the jurisdiction of the local law
enforcement agency.

end insert begin insert

(II) The ratio of licenses to population within the census tract
or census division in which the applicant premises are located
exceeds the ratio of licenses to population in the county in which
the applicant premises are located.

end insert begin delete

(e)

end delete

begin insert (d) end insert  The begin delete department end delete begin insert bureau end insert may consult with other state
agencies, state departments, public entities, or private entities for
the purposes of establishing statewide standards and regulations.

begin delete

(f)

end delete

begin insert (e) end insert  The begin delete department end delete begin insert bureau end insert may assist state taxation authorities
in the development of uniform policies for the state taxation of
licensees.

begin delete

(g)

end delete

begin insert (f) end insert  The begin delete department end delete begin insert bureau end insert may assist the Division of
Occupational Safety and Health in the Department of Industrial
Relations in the development of industry-specific regulations
related to the activities of licensees.

18107.  

(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.

18108.  

(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 begin delete secure, locked safe or vault end delete
begin insert secured and locked room, safe, or end insert begin insert vault, end insert 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.

18108.5.  

(a) The begin delete department end delete begin insert bureau end insert shall require an annual
audit of all licensees licensed pursuant to this part or otherwise
licensed by the begin delete department end delete begin insert bureau end insert to cultivate, manufacture,
process, begin delete test, end delete transport, store, or sell marijuana to be paid for by
each licensed vendor and dispensary.

(b) Completed audit reports shall also be submitted by the
licensee to local code enforcement offices, or the appropriate
locally designated enforcement entity, within 30 days of the
completion of the audit.

(c) It is the responsibility of each licensee licensed pursuant to
this part or otherwise licensed by the begin delete department end delete begin insert bureau end insert to
cultivate, manufacture, process, begin delete test, end delete transport, store, or sell
marijuana to develop a robust quality assurance protocol that
includes all of the provisions of this part.

begin insert

begin insert 18108.6. end insert   

(a) A laboratory certified by the bureau to perform
random sample testing of marijuana products pursuant to
paragraph (5) of subdivision (a) of Section 18106 shall not acquire,
cultivate, process, possess, store, manufacture, distribute, sell,
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 laboratory certified by the bureau to perform random
sample testing of marijuana products pursuant to paragraph (5)
of subdivision (a) of Section 18106 shall not acquire, cultivate,
process, possess, store, manufacture, distribute, sell, deliver,
transfer, transport, or dispense marijuana plants or marijuana
products except through a licensed cultivation site, or processing
facility.

end insert

18109.  

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 delete

18110.  

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

end delete begin insert

begin insert 18110. end insert   

(a) A willful violation of Section 18101.2, including
any attempt to falsify information on an application as required
by Section 18101.2, or to otherwise defraud or mislead a state or
local agency in the course of the application process, shall be
punishable by a civil fine of up to thirty-five thousand dollars
($35,000) for each individual violation. This subdivision shall
apply to both the provisional and permanent licensing application
processes under this part.

(b) A technical violation of Section 18101.2 shall, at the
bureau’s discretion, be punishable by a civil fine of up to ten
thousand dollars ($10,000) for each individual violation. This
subdivision shall apply to both the provisional and permanent
licensing application processes under this part.

end insert begin insert

begin insert 18110.1. end insert   

The executive officer or any district attorney, county
counsel, city attorney, or city prosecutor may bring an action to
enjoin a violation or the threatened violation of any provision of
this part, including, but not limited to, a licensee’s failure to correct
objectionable conditions following notice or as a result of any rule
promulgated pursuant to this part. The action shall be brought in
the county in which the violation occurred or is threatened to
occur. Any proceeding brought pursuant to this part shall conform
to the requirements of Chapter 3 (commencing with Section 525)
of Title 7 of Part 2 of the Code of Civil Procedure. Nothing in this
section shall diminish the authority of local government to take
requisite enforcement actions pertaining to its own ordinances or
regulations.

end insert

18111.  

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.

18112.  

This part shall in no way supersede the provisions of
Measure D, approved by the voters of the City of Los Angeles on
the May 21, 2013, ballot for the city, which granted marijuana
businesses and dispensaries qualified immunity consistent with
the terms of the measure and local ordinances. Notwithstanding
the provisions of this part, marijuana businesses and dispensaries
subject to the provisions of Measure D and its qualified immunity
shall continue to be subject to the ordinances and regulations of
the City of Los Angeles.

begin delete

18113.  

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

(b) (1) 

end delete

begin insert

begin insert 18113. end insert   

end insert

begin insert (a) end insert begin insert   end insert A patient who cultivates, possesses, stores,
manufactures, or transports marijuana exclusively for his or her
personal medical use and who does not sell, distribute, donate, or
provide marijuana to any other person is not considered a licensee
under this part and is exempt from licensure under this part.

begin delete

(2)

end delete

begin insert (b) end insert  A primary caregiver who cultivates, possesses, stores,
manufactures, transports, or provides marijuana exclusively for
the personal medical purposes of begin delete a end delete begin insert no more than five end insert specified
qualified begin delete patient end delete begin insert patients end insert for whom he or she is the primary
caregiver within the meaning of Section 11362.7 of the Health and
Safety Code and who does not receive remuneration for these
activities except for compensation in full compliance with
subdivision (c) of Section 11362.765 of the Health and Safety
Code is not considered a licensee under this part and is exempt
from licensure under this part.

begin insert

begin insert 18114. end insert   

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

(b) (1) Nothing in this section shall preclude any of the
following:

(A) Bureau employees notifying state or local agencies about
information submitted to the bureau that the employee suspects is
falsified or fraudulent.

(B) Notifications from the bureau to state or local agencies of
apparent violations of this part or any applicable local ordinance.

(C) Verification of requests by state or local agencies to confirm
licenses and certificates issued by the bureau or other state agency.

(D) Provision of information requested pursuant to a court
order or subpoena issued by a court or an administrative agency
or local governing body authorized by law to issue subpoenas.

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

end insert begin insert

begin insert 18115. end insert   

(a) The actions of a licensee or provisional licensee,
its employees, and its agents, permitted pursuant to a license or
provisional license issued by the bureau or otherwise permitted
by this part, that are conducted in accordance to the requirements
of this part and regulations adopted pursuant to the authority
granted by this part, are not unlawful under state law and shall
not be an offense subject to arrest or prosecution.

(b) The actions of a person who, in good faith and upon
investigation, allows his or her property to be used by a licensee
or provisional licensee, its employees, and its agents, as permitted
pursuant to a license or provisional license issued by the bureau
or otherwise permitted by this part, are not unlawful under state
law and shall not be an offense subject to arrest or prosecution.

(c) This section shall not be deemed to limit the authority or
remedies of a city, county, or city and county under any provision
of law, including, without limitation, Section 7 of Article XI of the
California Constitution.

end insert begin insert

begin insert 18116. end insert   

(a) A licensee shall not cultivate, process, store,
manufacture, transport, or sell medical marijuana in the state
unless accurate records are kept at the licensed premises of the
growing, processing, storing, manufacturing, transporting, or
selling by the licensee in the state. These records shall include the
name and address of the supplier of any marijuana received or
possessed by the licensee, the location at which the marijuana was
cultivated, the amount of marijuana received, the form in which
it is received, the name of the employee receiving it, and the date
of receipt. These records shall also include receipts for all
expenditures incurred by the licensee and banking records, if any,
for all funds obtained or expended in the performance of any
activity under the authority of the license, provided that a licensee
licensed to act at more than one premises may keep all records at
one of the licensed premises. Required records shall be kept for a
period of seven years from the date of the transaction.

(b) The bureau and any state or local agency may make any
examination of the books and records of any licensee and may
visit and inspect the premises of any licensee that the bureau may
deem necessary to perform its duties under this part.

(c) Any books or records requested by the bureau or any state
or local agency shall be provided by the licensee no later than at
the end of the next business day after the request is made.

(d) The bureau or any state or local agency may enter and
inspect the premises of any facility operated by a licensee between
the hours of 8 a.m. and 8 p.m. on any day that the facility is open,
or at any reasonable time, to ensure compliance and enforcement
of the provisions of this part or any local ordinance.

(e) If a licensee or any employee of a licensee refuses, impedes,
obstructs, or interferes with an inspection pursuant to this part or
local ordinance, or if the licensee fails to maintain or provide the
books and records required by this section, the licensee may be
summarily suspended pursuant to this part and the bureau shall
directly commence proceedings for the revocation of the license
in accordance with this part.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 23028 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

begin insert

begin insert 23028. end insert   

(a) (1) In addition to any authority otherwise provided
by law, the board of supervisors of any county may impose, by
ordinance, a tax on the privilege of cultivating, dispensing,
producing, processing, preparing, storing, providing, donating,
selling, or distributing marijuana by a licensee operating pursuant
to Chapter 18 (commencing with Section 26000) of Division 9 of
the Business and Professions Code. The tax may be imposed for
general governmental purposes or for purposes specified in the
ordinance by the board of supervisors.

(2) The board of supervisors shall specify in the ordinance
proposing the tax the activities subject to the tax, the applicable
rate or rates, the method of apportionment, and the manner of
collection of the tax. A tax imposed pursuant to this section is a
tax and not a fee or special assessment, and the tax is not required
to be apportioned on the basis of benefit to any person or property
or be applied uniformly to all taxpayers or all real property.

(3) A tax imposed by a county pursuant to this section by a
county may include a transactions and use tax imposed solely for
marijuana or marijuana products, which shall otherwise conform
to Part 1.6 (commencing with Section 7251) of Division 2 of the
Revenue and Taxation Code. Notwithstanding Section 7251.1 of
the Revenue and Taxation Code, the tax may be imposed at any
rate specified by the board of supervisors, and the tax rate
authorized by this section shall not be considered for purposes of
the combined tax rate limitation established by that section.

(4) The tax authorized by this section may be imposed upon any
or all of the activities set forth in paragraph (1), regardless of
whether the activity is undertaken individually, collectively, or
cooperatively, and regardless of whether the activity is for
compensation or gratuitously, as determined by the board of
supervisors.

(5) The board of supervisors shall specify whether the tax
applies throughout the entire county or within the unincorporated
area of the county.

(b) In addition to any other method of collection authorized by
law, the board of supervisors may provide for collection of the tax
imposed pursuant to this section in the same manner, and subject
to the same penalties and priority of lien, as other charges and
taxes fixed and collected by the county.

(c) Any tax imposed pursuant to this section shall be subject to
applicable voter approval requirements imposed by any other law.

(d) For purposes of this section, “marijuana” shall have the
meanings set forth in Section 18100 of the Business and Professions
Code.

(e) This section does not limit or prohibit the levy or collection
or any other fee, charge, or tax, or any license or service fee or
charge upon, or related to, the activities set forth in subdivision
(a) as otherwise provided by law. This section shall not be
construed as a limitation upon the taxing authority of any county
as provided by other law.

end insert

begin delete SEC. 5. end delete
begin insert SEC. 6. end insert   

Article 8 (commencing with Section 111658) is added
to Chapter 6 of Part 5 of Division 104 of the Health and Safety
Code, to read:

 

Article 8.  Medical Marijuana

 

111658.  

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

begin insert

(a) “Bureau” means the Bureau of Medical Marijuana
Regulations in the Department of Consumer Affairs.

end insert begin delete

(a)

end delete

begin insert (b) end insert  “Certified testing laboratories” means a laboratory that is
certified by the begin delete department end delete begin insert bureau end insert to perform random sample
testing of marijuana pursuant to the certification standards for
those facilities promulgated by the begin delete department. end delete begin insert bureau. end insert

begin delete

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

end delete

(c) “Edible marijuana product” means marijuana or a
marijuana-derived product that is ingested or meant to be ingested
through the mouth and into the digestive system.

begin delete

(d) “Marijuana” means marijuana, as defined by Section 11018.

end delete begin insert

(d) “Marijuana” means all parts of the plant Cannabis sativa
L. sativa, cannabis indica, or cannabis ruderalis, whether growing
or not; the seeds thereof; the resin, whether crude or purified,
extracted from any part of the plant; and every compound,
manufacture, salt, derivative, mixture, or preparation of the plant,
its seeds, or resin. “Marijuana” does not include the mature stalks
of the plant, fiber produced from the stalks, oil or cake made from
the seeds of the plant, any other compound, manufacture, salt,
derivative, mixture, or preparation of the mature stalks (except
the resin extracted therefrom), fiber, oil, or cake, or the sterilized
seed of the plant which is incapable of germination. “Marijuana”
also means marijuana, as defined by Section 11018.

end insert

(e) “Representative samples” means samples taken from each
batch or shipment of marijuana received from a licensed cultivation
site or any other source if intended for sale.

111659.  

The begin delete department, end delete begin insert bureau, end insert by July 1, 2016, shall
accomplish the following:

(a) Establish quality assurance protocols to ensure uniform
testing standards for all marijuana sold via dispensaries or other
facilities, or cultivated by any facilities, that are licensed pursuant
to Part 5 (commencing with Section 18100) of Division 7 of the
Business and Professions Code.

(b) In consultation with outside entities at its discretion, develop
a list of certified testing laboratories that can perform uniform
testing in compliance with this article, and post that list on its
Internet Web site.

111660.  

(a) Licensees licensed pursuant to Part 5 (commencing
with Section 18100) of Division 7 of the Business and Professions
Code shall bear the responsibility for contracting with certified
testing laboratories for regular, systematic testing of representative
samples of all marijuana cultivated or intended for sale or
distribution, and shall bear the cost of that testing.

(b) Licensees licensed pursuant to Part 5 (commencing with
Section 18100) of Division 7 of the Business and Professions Code
shall provide results of test reports to local code enforcement
officers, any other locally designated enforcement entity, and the
begin delete department end delete begin insert bureau end insert both on a quarterly basis and upon request.

111661.  

Quality assurance protocols shall be required between
all licensed cultivation sites or licensed processing facilities and
licensed dispensing facilities to guarantee safe and reliable
medicinal marijuana delivery to all patients. These quality
assurance protocols shall include:

(a) Providing of supplier information to dispensaries in order
for recall procedures to be implemented, if and when necessary.

(b) Safety testing of all marijuana prior to packaging for sale
and patient exposure to identify and eliminate microbiological
contaminants and chemical residue.

(c) Labeling of all marijuana and marijuana products that shall,
at a minimum, include the following:

(1) Clear dosage in total milligrams delivered for all products.

(2) Clear indication, in bold font, that the product contains
marijuana.

(3) Tetrahydrocannabinol (THC) and cannabidiol (CBD)
content.

111662.  

For purposes of this article, edible marijuana products
are deemed to be unadulterated food products. In addition to the
quality assurance standards provided in Section 111661, all edible
marijuana products shall comply with the following requirements:

(a) Baked edible marijuana products (such as brownies, bars,
cookies, and cakes), tinctures, and other edible marijuana products
that do not require refrigeration or hot holding may be
manufactured, sold, or otherwise distributed at facilities licensed
pursuant to Part 5 (commencing with Section 18100) of Division
7 of the Business and Professions Code.

(b) Licensed marijuana facilities shall have an owner or
employee who has successfully passed an approved and accredited
food safety certification examination as specified in Sections
113947.1, 113947.2, and 113947.3 of the Health and Safety Code
prior to selling, manufacturing, or distributing edible marijuana
products requiring refrigeration or hot holding.

(c) Individuals’ manufacturing or selling edible marijuana
products shall thoroughly wash their hands before commencing
production and before handling finished edible marijuana products.

(d) All edible marijuana products shall be individually wrapped
at the original point of preparation. All edible marijuana products
shall be packaged in a fashion that does not exceed a single
individual serving size.

(e) Products containing tetrahydrocannabinol (THC) shall be
prepared in compliance with maximum potency standards for THC
and THC concentrates set forth in the begin delete department’s end delete begin insert bureau’s end insert
regulations.

(f) Prior to sale or distribution at a licensed dispensing facility,
edible marijuana products shall be labeled and in an opaque and
tamper evident package. Labels and packages of edible marijuana
products shall meet the following requirements:

(1) Edible marijuana packages and labels shall not be made to
be attractive to children.

(2) All edible marijuana product labels shall include the
following information, prominently displayed and in a clear and
legible font:

(A) Manufacture date.

(B) The statement “KEEP OUT OF REACH OF CHILDREN.”

(C) The statement “FOR MEDICAL USE ONLY.”

(D) Net weight of marijuana in package.

(E) A warning, if nuts or other known allergens are used, and
shall include the total weight, in ounces or grams, of marijuana in
the package.

(F) Tetrahydrocannabinol (THC) and cannabidiol (CBD)
content.

(g) Photos or images of food are not allowed on edible marijuana
product packages or labels.

(h) Only generic food names may be used to describe edible
marijuana products. For example, “snickerdoodle” may not be
used to describe a cinnamon cookie.

begin delete

SEC. 6.  

Chapter 3.8 (commencing with Section 7295) is added
to Part 1.7 of Division 2 of the Revenue and Taxation Code, to
read:

 

Chapter  3.8. Medical Marijuana

 

7295.  

(a) In addition to any authority otherwise provided by
law, the legislative body of any county may levy a tax on the
privilege of cultivating, dispensing, producing, processing,
preparing, storing, providing, or distributing marijuana or products
containing marijuana.

(b) The tax may be levied for general governmental purposes
or for specific purposes specified by the legislative body.

(c) The legislative body shall specify the activities subject to
the tax, the applicable rate or rates, the method of apportionment,
and manner of collection of the tax. A tax imposed pursuant to
this section is a tax and not a fee or special assessment, and there
is no requirement that the tax be apportioned on the basis of benefit
to any property or be applied uniformly to all taxpayers or all real
property. The tax imposed pursuant to this section may be based
on any reasonable basis as determined by the legislative body.

(d) In addition to any other method of collection authorized by
law, the legislative body may provide for collection of the tax
imposed pursuant to this section in the same manner, and subject
to the same penalties and priority of lien as, other charges and
taxes fixed and collected by the county.

(e) The tax may be imposed upon any or all of the activities set
forth in subdivision (a), regardless of whether the activity is
undertaken individually, collectively, or cooperatively, and
regardless of whether the activity is undertaken for compensation
or without compensation or profit, as determined by the legislative
body.

(f) Any tax levied pursuant to this section shall be subject to
any applicable voter approval requirement imposed by any other
provision of law.

(g) The tax, when levied by the legislative body of a county,
shall apply throughout the entire county or within the
unincorporated area of the county, as specified by the legislative
body.

(h) For purposes of this section, “marijuana” means marijuana,
as defined by Section 11018 of the Health and Safety Code.

(i) This section is declaratory of existing law, and does not limit
or prohibit the levy or collection or any other fee, charge, or tax,
or any license or service fee or charge upon, or related to, the
activities set forth in subdivision (a) as provided by other provisions
of law.

end delete

begin insert

begin insert SEC. 7. end insert   

end insert begin insert

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

end insert

begin insert

begin insert SEC. 8. end insert   

end insert begin insert

The Legislature finds and declares that Section 4 of
this act imposes a limitation on the public’s right of access to the
meetings of public bodies or the writings of public officials and
agencies within the meaning of Section 3 of Article I of the
California Constitution. Pursuant to that constitutional provision,
the Legislature makes the following findings to demonstrate the
interest protected by this limitation and the need for protecting
that interest:

end insert begin insert

The limitation imposed under this act is necessary for purposes
of compliance with the federal Health Insurance Portability and
Accountability Act (42 U.S.C. Sec. 1320d et seq.), the
Confidentiality of Medical Information Act (Part 2.6 (commencing
with Section 56) of Division 1 of the Civil Code), and the Insurance
Information Privacy Protection Act (Article 6.6 (commencing with
Section 79) of Chapter 1 of Part 2 of Division 1 of the Insurance
Code).

end insert

begin delete SEC. 7. end delete
begin insert SEC. 9. end insert   

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