Amended in Assembly January 13, 2016

Amended in Assembly January 4, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 26

Introduced by Assembly Member Jones-Sawyer

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(Coauthor: Assembly Member Bonilla)

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December 1, 2014

An act to amend Sections 19322 and 19323 of, and to add Section 19326.5 to, the Business and Professions Code, relating to medical cannabis.

LEGISLATIVE COUNSEL’S DIGEST

AB 26, as amended, Jones-Sawyer. Medical cannabis.

(1) Existing law, the Compassionate Use Act of 1996, an initiative measure enacted by the approval of Proposition 215 at the November 5, 1996, statewide general election, authorizes the use of marijuana for medical purposes. Existing law, the Medical Marijuana Regulation and Safety Act (MMRSA), enacted by the Legislature, establishes within the Department of Consumer Affairs the Bureau of Medical Marijuana Regulation, and provides for the state licensure and regulation of certain commercial medical marijuana activities by the Department of Consumer Affairs, the Department of Food and Agriculture, or the State Department of Public Health, as specified. MMRSA requires an applicant for state licensure to provide specified information and a statement, signed by the applicant under penalty of perjury, that the information is complete, true, and accurate. MMRSA authorizes a state licensing authority to deny an application if specified conditions are met, and requires a state licensee, among other things, to obtain applicable local licenses prior to commencing commercial cannabis activity and to keep accurate records of commercial cannabis activity.

This bill would require a state licensee to institute and maintain a training program for the licensee’s agents and employees regarding compliance with MMRSA, as specified, and would require that an application for state licensure include a detailed description of the applicant’s program, thereby modifying the crime of perjury and imposing a state-mandated local program. The bill would make the bureau the sole state agency responsible for approving and regulating the programs and would prohibit the bureau from approving a program provided by or through certain apprenticeship programs. The bill would require a state licensing authority to deny the application of an applicant that does not have, or revoke the license of a state licensee that fails to institute or maintain, a program approved by the bureau.

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

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

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

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

SECTION 1.  

Section 19322 of the Business and Professions
Code is amended to read:

19322.  

(a) A person or entity shall not submit an application
for a state license issued by the department pursuant to this chapter
unless that person or entity has received a license, permit, or
authorization by a local jurisdiction. An applicant for any type of
state license issued pursuant to this chapter shall do all of the
following:

(1) Electronically submit to the Department of Justice 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 or federal convictions and arrests,
and information as to the existence and content of a record of state
or 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.

(A) The Department of Justice shall provide a response to the
licensing authority pursuant to paragraph (1) of subdivision (p) of
Section 11105 of the Penal Code.

(B) The licensing authority shall request from the Department
of Justice subsequent notification service, as provided pursuant to
Section 11105.2 of the Penal Code, for applicants.

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

(2) Provide documentation issued by the local jurisdiction in
which the proposed business is operating certifying that the
applicant is or will be in compliance with all local ordinances and
regulations.

(3) Provide evidence of the legal right to occupy and use the
proposed location. For an applicant seeking a cultivator, distributor,
manufacturing, or dispensary license, provide a statement from
the owner of real property or their agent where the cultivation,
distribution, manufacturing, or dispensing commercial medical
cannabis activities will occur, as proof to demonstrate the
landowner has acknowledged and consented to permit cultivation,
distribution, manufacturing, or dispensary activities to be conducted
on the property by the tenant applicant.

(4) If the application is for a cultivator or a dispensary, provide
evidence that the proposed location is located beyond at least a
600-foot radius from a school, as required by Section 11362.768
of the Health and Safety Code.

(5) Provide a statement, signed by the applicant under penalty
of perjury, that the information provided is complete, true, and
accurate.

(6) (A) For an applicant with 20 or more employees, provide
a statement that the applicant will enter into, or demonstrate that
it has already entered into, and abide by the terms of a labor peace
agreement.

(B) For the purposes of this paragraph, “employee” does not
include a supervisor.

(C) For purposes of this paragraph, “supervisor” means an
individual having authority, in the interest of the licensee, to hire,
transfer, suspend, lay off, recall, promote, discharge, assign,
reward, or discipline other employees, or responsibility to direct
them or to adjust their grievances, or effectively to recommend
such action, if, in connection with the foregoing, the exercise of
that authority is not of a merely routine or clerical nature, but
requires the use of independent judgment.

(7) Provide the applicant’s seller’s permit number issued
pursuant to Part 1 (commencing with Section 6001) of Division 2
of the Revenue and Taxation Code or indicate that the applicant
is currently applying for a seller’s permit.

(8) Provide any other information required by the licensing
authority.

(9) For an applicant seeking a cultivation license, provide a
statement declaring the applicant is an “agricultural employer,” as
defined in the Alatorre-Zenovich-Dunlap-Berman Agricultural
Labor Relations Act of 1975 (Part 3.5 (commencing with Section
1140) of Division 2 of the Labor Code), to the extent not prohibited
by law.

(10) For an applicant seeking licensure as a testing laboratory,
register with the State Department of Public Health and provide
any information required by the State Department of Public Health.

(11) Pay all applicable fees required for licensure by the
licensing authority.

(b) For applicants seeking licensure to cultivate, distribute, or
manufacture medical cannabis, the application shall also include
a detailed description of the applicant’s operating procedures for
all of the following, as required by the licensing authority:

(1) Cultivation.

(2) Extraction and infusion methods.

(3) The transportation process.

(4) Inventory procedures.

(5) Quality control procedures.

(c) For all applicants, the application shall also include a detailed
description of the agent and employee training program that the
applicant has instituted, or will institute, pursuant to Section
19326.5. A licensing authority shall not approve an application
unless the applicant’s training program is approved by the bureau.
The bureau shall not approve a training program provided, or
proposed to be provided, by or through an apprenticeship program
approved by the Chief of the Division of Apprenticeship Standards.

SEC. 2.  

Section 19323 of the Business and Professions Code
is amended to read:

19323.  

(a) The licensing authority shall deny an application
if either the applicant or the premises for which a state license is
applied do not qualify for licensure under this chapter.

(b) The licensing authority may deny the application for
licensure or renewal of a state license if any of the following
conditions apply:

(1) Failure to comply with the provisions of this chapter or any
rule or regulation adopted pursuant to this chapter, including but
not limited to, any requirement imposed to protect natural
resources, instream flow, and water quality pursuant to subdivision
(a) of Section 19332.

(2) Conduct that constitutes grounds for denial of licensure
pursuant to Chapter 2 (commencing with Section 480) of Division
1.5.

(3) A local agency has notified the licensing authority that a
licensee or applicant within its jurisdiction is in violation of state
rules and regulation relating to commercial cannabis activities,
and the licensing authority, through an investigation, has
determined that the violation is grounds for termination or
revocation of the license. The licensing authority shall have the
authority to collect reasonable costs, as determined by the licensing
authority, for investigation from the licensee or applicant.

(4) The applicant has failed to provide information required by
the licensing authority.

(5) The applicant or licensee has been convicted of an offense
that is substantially related to the qualifications, functions, or duties
of the business or profession for which the application is made,
except that if the licensing authority determines that the applicant
or licensee is otherwise suitable to be issued a license and granting
the license would not compromise public safety, the licensing
authority shall conduct a thorough review of the nature of the
crime, conviction, circumstances, and evidence of rehabilitation
of the applicant, and shall evaluate the suitability of the applicant
or licensee to be issued a license based on the evidence found
through the review. In determining which offenses are substantially
related to the qualifications, functions, or duties of the business or
profession for which the application is made, the licensing authority
shall include, but not be limited to, the following:

(A) A felony conviction for the illegal possession for sale, sale,
manufacture, transportation, or cultivation of a controlled
substance.

(B) A violent felony conviction, as specified in subdivision (c)
of Section 667.5 of the Penal Code.

(C) A serious felony conviction, as specified in subdivision (c)
of Section 1192.7 of the Penal Code.

(D) A felony conviction involving fraud, deceit, or
embezzlement.

(6) The applicant, or any of its officers, directors, or owners, is
a licensed physician making patient recommendations for medical
cannabis pursuant to Section 11362.7 of the Health and Safety
Code.

(7) The applicant or any of its officers, directors, or owners has
been subject to fines or penalties for cultivation or production of
a controlled substance on public or private lands pursuant to
Section 12025 or 12025.1 of the Fish and Game Code.

(8) The applicant, or any of its officers, directors, or owners,
has been sanctioned by a licensing authority or a city, county, or
city and county for unlicensed commercial medical cannabis
activities or has had a license revoked under this chapter in the
three years immediately preceding the date the application is filed
with the licensing authority.

(9) Failure to obtain and maintain a valid seller’s permit required
pursuant to Part 1 (commencing with Section 6001) of Division 2
of the Revenue and Taxation Code.

(c) The licensing authority shall deny an application unless the
applicant’s agent and employee training program is approved by
the bureau pursuant to subdivision (c) of Section 19322.

SEC. 3.  

Section 19326.5 is added to the Business and
Professions Code, to read:

19326.5.  

(a) A licensee shall institute and maintain a training
program to educate, inform, and train the licensee’s agents and
employees on compliance with this chapter. The training program
begin delete must end delete begin insert shall end insert be approved by the bureau and begin delete must end delete begin insert shall end insert include, but
is not limited to, training on applicable substantive legal
requirements, industry best practices, occupational health and
safety standards, and individual organizational or company policies.

(b) (1) The bureau shall adopt standards for the approval of
training programs and shall be the sole state agency responsible
for approving and regulating the training programs.

(2) The bureau shall not approve a training program provided,
or proposed to be provided, by or through an apprenticeship
program approved by the Chief of the Division of Apprenticeship
Standards.

(c) A state licensing authority shall revoke the license of any
licensee that fails to institute or maintain a training program
approved by the bureau pursuant to this section.

SEC. 4.  

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