Amended in Assembly January 25, 2016

Amended in Assembly January 13, 2016

Amended in Assembly January 4, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 26


Introduced by Assembly Member Jones-Sawyer

(Coauthor: Assembly Member Bonilla)

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 thebegin delete bureau the sole state agencyend deletebegin insert licensing authorityend insert responsible for approving and regulating the programs and would prohibit thebegin delete bureauend deletebegin insert licensing authorityend insert 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 thebegin delete bureau.end deletebegin insert licensing authority. This bill would require each state licensing authority to charge each training program a fee, as specified, to cover the costs for approving the training program. This bill would require that the fees collected be deposited in the appropriate account within the Medical Marijuana Regulation and Safety Act Fund. This bill would authorize each licensing authority to adjust fees as needed once a year to cover the costs of training program approval. end insert

(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:

P2    1

SECTION 1.  

Section 19322 of the Business and Professions
2Code
is amended to read:

3

19322.  

(a) A person or entity shall not submit an application
4for a state license issued by the department pursuant to this chapter
5unless that person or entity has received a license, permit, or
6authorization by a local jurisdiction. An applicant for any type of
P3    1state license issued pursuant to this chapter shall do all of the
2following:

3(1) Electronically submit to the Department of Justice fingerprint
4images and related information required by the Department of
5Justice for the purpose of obtaining information as to the existence
6and content of a record of state or federal convictions and arrests,
7and information as to the existence and content of a record of state
8or federal convictions and arrests for which the Department of
9Justice establishes that the person is free on bail or on his or her
10own recognizance, pending trial or appeal.

11(A) The Department of Justice shall provide a response to the
12licensing authority pursuant to paragraph (1) of subdivision (p) of
13Section 11105 of the Penal Code.

14(B) The licensing authority shall request from the Department
15of Justice subsequent notification service, as provided pursuant to
16Section 11105.2 of the Penal Code, for applicants.

17(C) The Department of Justice shall charge the applicant a fee
18sufficient to cover the reasonable cost of processing the requests
19described in this paragraph.

20(2) Provide documentation issued by the local jurisdiction in
21which the proposed business is operating certifying that the
22applicant is or will be in compliance with all local ordinances and
23regulations.

24(3) Provide evidence of the legal right to occupy and use the
25proposed location. For an applicant seeking a cultivator, distributor,
26manufacturing, or dispensary license, provide a statement from
27the owner of real property or their agent where the cultivation,
28distribution, manufacturing, or dispensing commercial medical
29cannabis activities will occur, as proof to demonstrate the
30landowner has acknowledged and consented to permit cultivation,
31distribution, manufacturing, or dispensary activities to be conducted
32on the property by the tenant applicant.

33(4) If the application is for a cultivator or a dispensary, provide
34evidence that the proposed location is located beyond at least a
35600-foot radius from a school, as required by Section 11362.768
36of the Health and Safety Code.

37(5) Provide a statement, signed by the applicant under penalty
38of perjury, that the information provided is complete, true, and
39accurate.

P4    1(6) (A) For an applicant with 20 or more employees, provide
2a statement that the applicant will enter into, or demonstrate that
3it has already entered into, and abide by the terms of a labor peace
4agreement.

5(B) For the purposes of this paragraph, “employee” does not
6include a supervisor.

7(C) For purposes of this paragraph, “supervisor” means an
8individual having authority, in the interest of the licensee, to hire,
9transfer, suspend, lay off, recall, promote, discharge, assign,
10reward, or discipline other employees, or responsibility to direct
11them or to adjust their grievances, or effectively to recommend
12such action, if, in connection with the foregoing, the exercise of
13that authority is not of a merely routine or clerical nature, but
14requires the use of independent judgment.

15(7) Provide the applicant’s seller’s permit number issued
16pursuant to Part 1 (commencing with Section 6001) of Division 2
17of the Revenue and Taxation Code or indicate that the applicant
18is currently applying for a seller’s permit.

19(8) Provide any other information required by the licensing
20authority.

21(9) For an applicant seeking a cultivation license, provide a
22statement declaring the applicant is an “agricultural employer,” as
23defined in the Alatorre-Zenovich-Dunlap-Berman Agricultural
24Labor Relations Act of 1975 (Part 3.5 (commencing with Section
251140) of Division 2 of the Labor Code), to the extent not prohibited
26by law.

27(10) For an applicant seeking licensure as a testing laboratory,
28register with the State Department of Public Health and provide
29any information required by the State Department of Public Health.

30(11) Pay all applicable fees required for licensure by the
31licensing authority.

32(b) For applicants seeking licensure to cultivate, distribute, or
33manufacture medical cannabis, the application shall also include
34a detailed description of the applicant’s operating procedures for
35all of the following, as required by the licensing authority:

36(1) Cultivation.

37(2) Extraction and infusion methods.

38(3) The transportation process.

39(4) Inventory procedures.

40(5) Quality control procedures.

P5    1(c) For all applicants, the application shall also include a detailed
2description of the agent and employee training program that the
3applicant has instituted, or will institute, pursuant to Section
4 19326.5. A licensing authority shall not approve an application
5unless the applicant’s training program is approved by thebegin delete bureau.end delete
6begin insert licensing authority.end insert Thebegin delete bureauend deletebegin insert licensing authorityend insert shall not
7approve a training program provided, or proposed to be provided,
8by or through an apprenticeship program approved by the Chief
9of the Division of Apprenticeship Standards.

10

SEC. 2.  

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

12

19323.  

(a) The licensing authority shall deny an application
13if either the applicant or the premises for which a state license is
14appliedbegin delete doend deletebegin insert doesend insert not qualify for licensure under this chapter.

15(b) The licensing authority may deny the application for
16licensure or renewal of a state license if any of the following
17conditions apply:

18(1) Failure to comply with the provisions of this chapter or any
19rule or regulation adopted pursuant to this chapter,begin delete includingend delete
20begin insert including,end insert but not limited to, any requirement imposed to protect
21natural resources, instream flow, and water quality pursuant to
22subdivision (a) of Section 19332.

23(2) Conduct that constitutes grounds for denial of licensure
24pursuant to Chapter 2 (commencing with Section 480) of Division
251.5.

26(3) A local agency has notified the licensing authority that a
27licensee or applicant within its jurisdiction is in violation of state
28rules and regulation relating to commercial cannabis activities,
29and the licensing authority, through an investigation, has
30determined that the violation is grounds for termination or
31revocation of the license. The licensing authority shall have the
32authority to collect reasonable costs, as determined by the licensing
33 authority, for investigation from the licensee or applicant.

34(4) The applicant has failed to provide information required by
35the licensing authority.

36(5) The applicant or licensee has been convicted of an offense
37that is substantially related to the qualifications, functions, or duties
38of the business or profession for which the application is made,
39except that if the licensing authority determines that the applicant
40or licensee is otherwise suitable to be issued a license and granting
P6    1the license would not compromise public safety, the licensing
2authority shall conduct a thorough review of the nature of the
3crime, conviction, circumstances, and evidence of rehabilitation
4of the applicant, and shall evaluate the suitability of the applicant
5or licensee to be issued a license based on the evidence found
6through the review. In determining which offenses are substantially
7related to the qualifications, functions, or duties of the business or
8profession for which the application is made, the licensing authority
9shall include, but not be limited to, the following:

10(A) A felony conviction for the illegal possession for sale, sale,
11manufacture, transportation, or cultivation of a controlled
12 substance.

13(B) A violent felony conviction, as specified in subdivision (c)
14of Section 667.5 of the Penal Code.

15(C) A serious felony conviction, as specified in subdivision (c)
16of Section 1192.7 of the Penal Code.

17(D) A felony conviction involving fraud, deceit, or
18embezzlement.

19(6) The applicant, or any of its officers, directors, or owners, is
20a licensed physician making patient recommendations for medical
21cannabis pursuant to Section 11362.7 of the Health and Safety
22Code.

23(7) The applicant or any of its officers, directors, or owners has
24been subject to fines or penalties for cultivation or production of
25a controlled substance on public or private lands pursuant to
26Section 12025 or 12025.1 of the Fish and Game Code.

27(8) The applicant, or any of its officers, directors, or owners,
28has been sanctioned by a licensing authority or a city, county, or
29city and county for unlicensed commercial medical cannabis
30activities or has had a license revoked under this chapter in the
31three years immediately preceding the date the application is filed
32with the licensing authority.

33(9) Failure to obtain and maintain a valid seller’s permit required
34pursuant to Part 1 (commencing with Section 6001) of Division 2
35of the Revenue and Taxation Code.

36(c) The licensing authority shall deny an application unless the
37 applicant’s agent and employee training program is approved by
38thebegin delete bureauend deletebegin insert licensing authorityend insert pursuant to subdivision (c) of Section
3919322.

P7    1

SEC. 3.  

Section 19326.5 is added to the Business and
2Professions Code
, to read:

3

19326.5.  

(a) A licensee shall institute and maintain a training
4program to educate, inform, and train the licensee’s agents and
5employees on compliance with this chapter. The training program
6shall be approved by thebegin delete bureauend deletebegin insert state licensing authorityend insert and shall
7include, but is not limited to, training on applicable substantive
8legal requirements, industry best practices, occupational health
9and safety standards, and individual organizational or company
10policies.

11(b) (1) begin deleteThe bureau end deletebegin insertEach state licensing authority end insertshall adopt
12standards for the approval of training programs andbegin delete shall be the
13sole state agencyend delete
begin insert each state licensing authority shall beend insert responsible
14for approving and regulatingbegin delete theend delete trainingbegin delete programs.end deletebegin insert programs
15relevant to their licensees.end insert

16(2) begin deleteThe bureau end deletebegin insertA state licensing authority end insertshall not approve a
17training program provided, or proposed to be provided, by or
18through an apprenticeship program approved by the Chief of the
19Division of Apprenticeship Standards.

20(c) A state licensing authority shall revoke the license of any
21licensee that fails to institute or maintain a training program
22approvedbegin delete by the bureauend delete pursuant to this section.

begin insert

23(d) (1) Each state licensing authority shall charge each training
24program a fee to cover costs incurred for approving the training
25program pursuant to this section. Revenues collected pursuant to
26this subdivision shall be deposited in the appropriate fee account
27within the Medical Marijuana Regulation and Safety Act Fund
28established pursuant to Section 19350 of the Business and
29Professions Code. Total fees assessed shall not exceed the
30reasonable regulatory costs for training program approval. Each
31licensing authority may adjust fees as needed, but no more than
32once per year, to generate sufficient revenue to cover the costs of
33training program approval.

end insert
begin insert

34(2) By July 1, 2018, revenue collected pursuant to this
35subdivision shall be projected to fairly and proportionately
36generate sufficient revenue to fully cover the costs of training
37program approval.

end insert
38

SEC. 4.  

No reimbursement is required by this act pursuant to
39Section 6 of Article XIII B of the California Constitution because
40the only costs that may be incurred by a local agency or school
P8    1district will be incurred because this act creates a new crime or
2infraction, eliminates a crime or infraction, or changes the penalty
3for a crime or infraction, within the meaning of Section 17556 of
4the Government Code, or changes the definition of a crime within
5the meaning of Section 6 of Article XIII B of the California
6Constitution.



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