BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
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|Bill No: |AB 21 |Hearing |1/13/2016|
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|Author: |Bonta |Tax Levy: |No |
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|Version: |1/4/16 |Fiscal: |No |
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|Consultant|Favorini-Csorba |
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MEDICAL MARIJUANA: CULTIVATION LICENSES
Repeals a March 1, 2016 deadline by which cities and counties
must act on ordinances to regulate or ban medical marijuana
cultivation.
Background and Existing Law
Federal and state law prohibits the possession, possession with
intent to sell, cultivation, sale, transportation, importation,
or furnishing of marijuana. However, in 1996, California voters
approved Proposition 215, known as the Compassionate use Act of
1996 (CUA). Under CUA, qualified patients with specified
illnesses or their primary caregivers cannot be prosecuted for
possessing or cultivating medical marijuana upon the written or
oral recommendation or approval of an attending physician.
Thus, CUA allowed qualified patients and primary caregivers to
obtain and use medical marijuana.
The Legislature clarified CUA in 2003 by enacting SB 420
(Vasconcellos, 2003). SB 420 exempted qualified patients and
caregivers from prosecution for using or from collectively or
cooperatively cultivating medical marijuana and established a
medical marijuana card program for patients to use on a
voluntary basis. SB 420 provides a safe harbor for qualified
patients as to the amount of marijuana they may possess and the
number of plants they may maintain. It also protects patients
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with valid identification cards from both arrest and criminal
liability for possession, transportation, delivery, or
cultivation of marijuana. Thus, California's estimated $1
billion medical marijuana industry exists amid a conflict
between federal and state law, and within state law itself. The
industry remained largely unregulated until 2015.
Local Authority Over Medical Marijuana. By exempting qualified
patients and caregivers from prosecution for using or from
collectively or cooperatively cultivating medical marijuana, the
CUA and SB 420 effectively authorized the cultivation and use of
medical marijuana. These laws have triggered the growth of
medical marijuana dispensaries in many localities, and in
response, local governments have sought to exercise their police
powers to regulate or ban activities relating to medical
marijuana. The police power is granted by the California
Constitution and allows a city to "make and enforce within its
limits, all local, police, sanitary and other ordinances and
regulations not in conflict with general laws, known as the
police power of cities." It is from this fundamental power that
local governments derive their authority to regulate land
through planning, zoning, and building ordinances, thereby
protecting public health, safety and welfare. Local agencies
also use this police power to abate nuisances to protect public
health. Under this power, many cities in California permanently
banned dispensary operations, while others have adopted
temporary land use moratoria, adopted regulations permitting a
limited number of dispensaries, or otherwise regulated the sale,
storage, and delivery of medical marijuana. Some local agencies
limit felons from appearing on property that houses a dispensary
operation. Additionally, many other local agencies in
California ban, limit, or otherwise regulate both outdoor and
indoor cultivation of medical marijuana. Other jurisdictions
have established "permissive" zoning ordinances, whereby any
land use-such as cultivation of medical marijuana-that is not
explicitly authorized by the ordinance is prohibited.
State law, including initiatives, generally preempt local
ordinances when the two conflict. However, courts have
generally supported local agencies against claims that
ordinances regulating or banning medical marijuana activities
conflict with the CUA or SB 420. In particular, the California
Supreme Court upheld local dispensary bans in City of Riverside
v. Inland Empire Patients Health and Welfare Center (Case
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S198638, 2013). In addition, the Third Appellate District Court
upheld local cultivation bans in Maral v. City of Live Oak (Case
C071822, 2013). In general, courts have reasoned that nothing
in the CUA or SB 420 expressly or impliedly limited the inherent
authority of a local jurisdiction, by its own ordinances, to
regulate the use of its land, including the authority to provide
that facilities for the distribution of medical marijuana will
not be permitted to operate within its borders. Accordingly,
many California jurisdictions, roughly estimated by the League
of California Cities at 50% pending completion of a statewide
survey, ban the cultivation and sale of medical marijuana
altogether.
Medical Marijuana Regulation and Safety Act. In 2015, the
Legislature enacted the Medical Marijuana Regulation and Safety
Act (MMRSA), a package of legislation that comprehensively
regulates many aspects of medical marijuana including
cultivation, manufacturing, transportation, distribution, sale,
and product safety. The MMRSA comprises three bills-SB 643
(McGuire, 2015), AB 243 (Wood, 2015), and AB 266 (Bonta, 2015).
Among other provisions, MMRSA:
Creates the Bureau of Medical Marijuana Regulation (the
Bureau) within the Department of Consumer Affairs to
oversee and enforce the state's medical marijuana
regulations, in collaboration with the Board of
Equalization (BOE), the California Department of Public
Health, and the California Department of Food and
Agriculture (CDFA);
Establishes categories of licenses for various medical
marijuana activities, such as cultivation, manufacturing,
distribution, transportation, and sale, and provides
certain state agencies with the authority to issue those
licenses and enforce their terms;
Requires BOE and CDFA to implement a program that allows
regulators to uniquely identify each legally cultivated
medical marijuana plant and trace that plant throughout the
distribution chain;
Prohibits licensees from commencing activity under the
authority of a state license until the applicant has
obtained a license or permit pursuant to the applicable
local ordinance;
Includes protections of the ability of local governments
to pass and enforce laws, licensing requirements, and
zoning ordinances.
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Under MMRSA, in addition, MMRSA explicitly authorizes local
governments to establish a licensing system for the cultivation
of medical marijuana through their current or future land use
authority, and prohibits the cultivation of medical marijuana
without obtaining both a state license-issued by CDFA-and a
local license. However, MMRSA also designates CDFA as the sole
licensing authority for medical marijuana cultivation in cities
or counties that have not developed regulations or banned
medical marijuana cultivation by March 1, 2016.
On September 11, 2015, Assemblymember Wood wrote a letter in the
Assembly Journal stating his intent to introduce cleanup
legislation to address three errors in MMRSA, including to
remove the March 1, 2016 deadline by which cities and counties
must regulate or ban cultivation in order to prevent CDFA from
becoming the sole licensing authority in that jurisdiction.
Faced with the prospect of permanently losing their authority to
regulate medical marijuana cultivation, many cities and counties
are moving quickly to ban medical marijuana cultivation. At
least 19 cities have banned cultivation following the passage of
AB 243, and according to a December 31, 2015 San Francisco
Chronicle article, at least 40 cities and counties across the
state were currently considering bans of medical marijuana
cultivation or have a ban pending approval. Some local
officials want more time to consider the best way to regulate
medical marijuana cultivation in their jurisdictions and adopt
appropriate zoning ordinances.
Proposed Law
AB 21 deletes the provision of MMRSA that makes CDFA the sole
licensing authority for medical marijuana cultivation in a city
or county that has not developed regulations that license or ban
cultivation, either expressly or otherwise under principles of
permissive zoning, by March 1, 2016.
State Revenue Impact
No estimate.
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Comments
1. Purpose of the bill. The MMRSA contains an inadvertent error
made at the close of the 2015 legislative session that imposes a
significant burden on local governments and has resulted in
hurried consideration of medical marijuana bans and restrictions
at the local level. By permanently making CDFA the sole
regulator of medical marijuana cultivation in cities and
counties that do not have regulations in place by March 1, 2016,
this provision of MMRSA undermines the principle of local
control that exists throughout the remainder of the act. It also
creates a very real risk of a state agency imposing uniform
regulations on cultivation that do not consider the needs and
unique circumstances of local communities. As a result, cities
and counties throughout California are rushing to develop
regulations or bans on medical marijuana cultivation by the
March 1, 2016 deadline, simply so they don't permanently lose
their ability to regulate the cultivation of marijuana in their
jurisdiction. But this process deprives local officials and
their constituents of the ability to carefully consider how
marijuana should be cultivated in their communities. There are
no similar deadlines in MMRSA for local officials to act on
licensing of other medical marijuana activities, such as the
licensing of dispensaries. Instead, local officials are given
the necessary time and flexibility to determine what additional
local licensing requirements may be necessary. AB 21 provides a
straightforward solution to these issues by removing the
deadline and the related risk of a state takeover of cultivation
licensing.
2. Let's be clear. AB 21 introduces ambiguity into the legality
of new medical marijuana cultivation in some local
jurisdictions. Currently, MMRSA prohibits cultivation of
medical marijuana without both a state and a local license.
However, MMRSA designates CDFA as the sole licensing authority
for cultivation if the local jurisdiction does not have
regulations in place by March 1, 2016. AB 21 deletes the
provision that contains both the deadline and the designation of
CDFA as sole licensing authority. Thus, AB 21 raises the
question of whether medical marijuana can be cultivated in a
jurisdiction that has not implemented medical marijuana
regulations, since a cultivator would not be able to receive a
local license. Although another provision of MMRSA- subdivision
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(c) of Section 19321 of the Business and Professions Code-allows
medical marijuana facilities that were in compliance with local
ordinances prior to January 1, 2018 to continue to operate, it
is not clear whether this provision trumps the requirement to
obtain both a state and local license in order to cultivate.
Accordingly, deleting this provision may result in de facto bans
on new cultivations of medical marijuana in cities and counties
that delay their development of regulations. If the purpose of
MMRSA is to eliminate the regulatory uncertainty that has
historically surrounded medical marijuana cultivation, the
Committee may wish to consider clarifying whether medical
marijuana can be cultivated with only a state license in
jurisdictions that have not passed an ordinance.
3. Unfinished business . AB 21 addresses a provision in MMRSA
that was identified as an error in the letter to the Assembly
Journal, and AB 1575 (Bonta, 2016) addresses a second error
relating to certain fees charged by the Department of Fish and
Wildlife (DFW). However, neither bill addresses the third
error, regarding qualified patients' and primary caregivers'
exemption from the cultivation licensing requirements in MMRSA.
Specifically, MMRSA states that an exemption for a qualified
patient or primary caregiver from the act's cultivation
licensing requirements does not limit or prevent a city or
county from regulating or banning any medical marijuana
activities, including cultivation, storage, manufacture, and
transport, by that person. The letter to the Journal indicated
the intent to remove this sentence. Importantly, whether a city
or county may ban cultivation by qualified patients and primary
caregivers through its land use authority was the subject of
recent litigation in the Fifth Appellate District Court of
Appeal (Byrd v. County of Fresno [2015]). The City of Fresno, a
respondent in the case, cited this provision of MMRSA as
granting the city new authority to ban cultivation by any entity
within its jurisdiction. In an unpublished opinion, the Court
of Appeal upheld the cultivation ban. The American Civil
Liberties Union is petitioning the Supreme Court to review this
decision and a decision in a related case. The Supreme Court
has not ruled on whether local jurisdictions may completely ban
cultivation by qualified patients or caregivers or considered
the impact of MMRSA on medical marijuana, so the outcome of
future cases may be affected by the continued inclusion of this
provision.
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4. Related legislation. AB 1575 (Bonta) was introduced in
January 2016 to address some additional drafting errors in
MMRSA, including an error raised in Assemblymember Wood's letter
to the Journal. Specifically, AB 1575 would clarify that
increased fees for remediation of environmental impacts of
marijuana cultivation shall be levied on only medical marijuana
cultivation activities that require a permit to alter a lake or
streambed, instead of increasing fees on any entity that
requires that type of permit. AB 1575 also requires the
Department of Public Health to establish uniform safety
standards on packaging of medical marijuana, allows the Bureau
to issue temporary permits for businesses to perform medical
marijuana-related activities, requires the Bureau to establish
standards for the delivery of medical marijuana and for
dispensary employees, and exempts commercial medical marijuana
activity by a licensed person from criminal penalties associated
with the transportation, sale, or administration of controlled
substances in the state. In addition, two bills address the
taxation of medical marijuana cultivation. SB 297 (McGuire,
2015), currently pending in the Senate Appropriations Committee,
states the legislature's intent to impose an excise tax on
medical marijuana at the point of sale. AB 1548 (Wood, 2015),
currently pending in the Assembly Revenue and Taxation
Committee, would establish a tax on the cultivation of medical
marijuana to fund environmental restoration and law enforcement
activities related to illegal marijuana cultivation.
5. Urgency. Regular statutes take effect on January 1 following
their enactment; bills passed in 2016 take effect on January 1,
2017. The California Constitution allows bills with urgency
clauses to take effect immediately if they're needed for the
public peace, health, and safety. AB 21 contains an urgency
clause declaring that it is necessary for its provisions to go
into effect immediately to enable local governments to protect
the health of their citizens by regulating marijuana at the
earliest possible date.
6. New Bill, Prior Votes Not Relevant . As passed by the
Assembly, AB 21 contained provisions relating to Global Warming
Solutions Act of 2006. The Senate Governance & Finance
Committee never heard that version of the bill. The January 4
amendments deleted AB 21's contents, changed the author of the
bill, and inserted the current language relating to medical
marijuana cultivation.
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7. Double referred. The Senate Rules Committee ordered a
double-referral of AB 21-first to the Senate Governance and
Finance Committee, which has jurisdiction over bills relating to
local agencies' regulatory and taxing authority, and then to the
Senate Health Committee, which has jurisdiction over bills
relating to public health and safety.
Assembly Actions
Not relevant to the January 4, 2016 version of the bill.
Support and
Opposition (1/7/2016)
Support : California Police Chiefs Association; California State
Association of Counties; City of Modesto; County Counsel, County
of Siskiyou; County of Del Norte; County of Humboldt; County of
Marin; County of Merced; County of Sacramento; County of Shasta;
County of Solano; County of Sonoma; League of California Cities;
Rural County Representatives of California; Supervisor Mike
Ennis, County of Tulare; Urban Counties of California.
Opposition : American Civil Liberties Union of California; Drug
Policy Alliance.
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