Amended in Senate June 20, 2016

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 tobegin delete institute and maintainend deletebegin insert implement, as specified,end insert a training program for the licensee’s agents and employees regarding compliance with MMRSA, asbegin delete specified, andend deletebegin insert specified. The billend insert would requirebegin delete that an application for state licensureend deletebegin insert an applicant with 20 or more employees toend insert includebegin insert in an application for state licensureend insert a detailed description of thebegin delete applicant’s program,end deletebegin insert training program the applicant has implemented or will implement,end insert thereby modifying the crime of perjury and imposing a state-mandated local program. The bill would make the licensing authority responsible for approving and regulating the programsbegin insert instituted and maintained by licenseesend insert andbegin insert 3rdend insertbegin insert-party providers of the programs. The billend insert would prohibit the licensing authority from approving a program provided by or through certain apprenticeship programs.begin insert The bill would authorize the licensing authority to approve a workplace training organization, as defined, as a 3rd-party provider.end insert The bill would require a state licensing authority to deny the application of an applicant that does notbegin delete have,end deletebegin insert implement,end insert or revoke the license of a state licensee that fails tobegin delete institute or maintain,end deletebegin insert implement within one year of obtaining a license,end insert a program approved by the licensingbegin delete authority. Thisend deletebegin insert authority or provided by an approved 3rd-party provider.end insertbegin insert Theend insert bill would require each state licensing authority to charge each training programbegin insert instituted and maintained by a licenseeend insert a fee, as specified, to cover the costs for approving the training program.begin delete Thisend deletebegin insert The bill would require each state licensing authority to charge each 3rd-party provider of training programs a fee, as specified, to cover the costs for approving the 3rd-party provider. Theend insert bill would require that the fees collected be deposited in the appropriate account within the Medical Marijuana Regulation and Safety Act Fund.begin delete Thisend deletebegin insert Theend insert bill would authorize each licensing authority to adjust fees as needed once a year to cover the costs of training programbegin insert and 3rd-party providerend insert approval.

(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:

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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
7state license issued pursuant to this chapter shall do all of the
8following:

9(1) Electronically submit to the Department of Justice fingerprint
10images and related information required by the Department of
11Justice for the purpose of obtaining information as to the existence
12and content of a record of state or federal convictions and arrests,
13and information as to the existence and content of a record of state
14or federal convictions and arrests for which the Department of
15Justice establishes that the person is free on bail or on his or her
16own recognizance, pending trial or appeal.

17(A) The Department of Justice shall provide a response to the
18licensing authority pursuant to paragraph (1) of subdivision (p) of
19Section 11105 of the Penal Code.

20(B) The licensing authority shall request from the Department
21of Justice subsequent notification service, as provided pursuant to
22Section 11105.2 of the Penal Code, for applicants.

23(C) The Department of Justice shall charge the applicant a fee
24sufficient to cover the reasonable cost of processing the requests
25described in this paragraph.

26(2) Provide documentation issued by the local jurisdiction in
27which the proposed business is operating certifying that the
28applicant is or will be in compliance with all local ordinances and
29regulations.

30(3) Provide evidence of the legal right to occupy and use the
31proposed location. For an applicant seeking a cultivator, distributor,
32manufacturing, or dispensary license, provide a statement from
33the owner of real property or their agent where the cultivation,
34distribution, manufacturing, or dispensing commercial medical
35cannabis activities will occur, as proof to demonstrate the
P4    1landowner has acknowledged and consented to permit cultivation,
2distribution, manufacturing, or dispensary activities to be conducted
3on the property by the tenant applicant.

4(4) If the application is for a cultivator or a dispensary, provide
5evidence that the proposed location is located beyond at least a
6600-foot radius from a school, as required by Section 11362.768
7of the Health and Safety Code.

8(5) Provide a statement, signed by the applicant under penalty
9of perjury, that the information provided is complete, true, and
10accurate.

11(6) (A) For an applicant with 20 or more employees, provide
12a statement that the applicant will enter into, or demonstrate that
13it has already entered into, and abide by the terms of a labor peace
14agreement.

15(B) For the purposes of this paragraph, “employee” does not
16include a supervisor.

17(C) For purposes of this paragraph, “supervisor” means an
18individual having authority, in the interest of the licensee, to hire,
19transfer, suspend, lay off, recall, promote, discharge, assign,
20reward, or discipline other employees, or responsibility to direct
21them or to adjust their grievances, or effectively to recommend
22such action, if, in connection with the foregoing, the exercise of
23that authority is not of a merely routine or clerical nature, but
24requires the use of independent judgment.

25(7) Provide the applicant’s seller’s permit number issued
26pursuant to Part 1 (commencing with Section 6001) of Division 2
27of the Revenue and Taxation Code or indicate that the applicant
28is currently applying for a seller’s permit.

29(8) Provide any other information required by the licensing
30authority.

31(9) For an applicant seeking a cultivation license, provide a
32statement declaring the applicant is an “agricultural employer,” as
33defined in the Alatorre-Zenovich-Dunlap-Berman Agricultural
34Labor Relations Act of 1975 (Part 3.5 (commencing with Section
351140) of Division 2 of the Labor Code), to the extent not prohibited
36by law.

37(10) For an applicant seeking licensure as a testing laboratory,
38register with the State Department of Public Health and provide
39any information required by the State Department of Public Health.

P5    1(11) Pay all applicable fees required for licensure by the
2licensing authority.

3(b) For applicants seeking licensure to cultivate, distribute, or
4manufacture medical cannabis, the application shall also include
5a detailed description of the applicant’s operating procedures for
6all of the following, as required by the licensing authority:

7(1) Cultivation.

8(2) Extraction and infusion methods.

9(3) The transportation process.

10(4) Inventory procedures.

11(5) Quality control procedures.

12(c) Forbegin delete all applicants,end deletebegin insert applicants with 20 or more employees,end insert
13 the application shall also include a detailed description of the agent
14and employee training program that the applicant hasbegin delete instituted,end delete
15begin insert implemented,end insert or willbegin delete institute,end deletebegin insert implement,end insert pursuant to Section
16 19326.5. A licensing authority shall not approve an application
17unless the applicant’s training programbegin insert or the third-party provider
18of the applicant’s training programend insert
is approved by the licensing
19authority. The licensing authority shall not approve a training
20program provided, or proposed to be provided, by or through an
21apprenticeship program approved by the Chief of the Division of
22Apprenticeship Standards.

23

SEC. 2.  

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

25

19323.  

(a) The licensing authority shall deny an application
26if either the applicant or the premises for which a state license is
27applied does not qualify for licensure under this chapter.

28(b) The licensing authority may deny the application for
29licensure or renewal of a state license if any of the following
30conditions apply:

31(1) Failure to comply with the provisions of this chapter or any
32rule or regulation adopted pursuant to this chapter, including, but
33not limited to, any requirement imposed to protect natural
34resources, instream flow, and water quality pursuant to subdivision
35(a) of Section 19332.

36(2) Conduct that constitutes grounds for denial of licensure
37pursuant to Chapter 2 (commencing with Section 480) of Division
381.5.

39(3) A local agency has notified the licensing authority that a
40licensee or applicant within its jurisdiction is in violation of state
P6    1rules and regulation relating to commercial cannabis activities,
2and the licensing authority, through an investigation, has
3determined that the violation is grounds for termination or
4revocation of the license. The licensing authority shall have the
5authority to collect reasonable costs, as determined by the licensing
6 authority, for investigation from the licensee or applicant.

7(4) The applicant has failed to provide information required by
8the licensing authority.

9(5) The applicant or licensee has been convicted of an offense
10that is substantially related to the qualifications, functions, or duties
11of the business or profession for which the application is made,
12except that if the licensing authority determines that the applicant
13or licensee is otherwise suitable to be issued a license and granting
14the license would not compromise public safety, the licensing
15authority shall conduct a thorough review of the nature of the
16crime, conviction, circumstances, and evidence of rehabilitation
17of the applicant, and shall evaluate the suitability of the applicant
18or licensee to be issued a license based on the evidence found
19through the review. In determining which offenses are substantially
20related to the qualifications, functions, or duties of the business or
21profession for which the application is made, the licensing authority
22shall include, but not be limited to, the following:

23(A) A felony conviction for the illegal possession for sale, sale,
24manufacture, transportation, or cultivation of a controlled
25 substance.

26(B) A violent felony conviction, as specified in subdivision (c)
27of Section 667.5 of the Penal Code.

28(C) A serious felony conviction, as specified in subdivision (c)
29of Section 1192.7 of the Penal Code.

30(D) A felony conviction involving fraud, deceit, or
31embezzlement.

32(6) The applicant, or any of its officers, directors, or owners, is
33a licensed physician making patient recommendations for medical
34cannabis pursuant to Section 11362.7 of the Health and Safety
35Code.

36(7) The applicant or any of its officers, directors, or owners has
37been subject to fines or penalties for cultivation or production of
38a controlled substance on public or private lands pursuant to
39Section 12025 or 12025.1 of the Fish and Game Code.

P7    1(8) The applicant, or any of its officers, directors, or owners,
2has been sanctioned by a licensing authority or a city, county, or
3city and county for unlicensed commercial medical cannabis
4activities or has had a license revoked under this chapter in the
5three years immediately preceding the date the application is filed
6with the licensing authority.

7(9) Failure to obtain and maintain a valid seller’s permit required
8pursuant to Part 1 (commencing with Section 6001) of Division 2
9of the Revenue and Taxation Code.

10(c) The licensing authority shall deny an application unless the begin delete11 applicant’send delete agent and employee training programbegin insert that the applicant
12implementsend insert
is approved by the licensing authoritybegin insert or provided by
13an approved third-party providerend insert
pursuant to subdivision (c) of
14Section 19322.

15

SEC. 3.  

Section 19326.5 is added to the Business and
16Professions Code
, to read:

17

19326.5.  

(a) A licensee shallbegin delete institute and maintainend deletebegin insert implementend insert
18 a training program to educate, inform, and train the licensee’s
19agents and employees on compliance with this chapter.begin delete Theend deletebegin insert A
20licensee shall implement a training program by either instituting
21and maintaining a training program or hiring a third-end insert
begin insertparty
22provider approved by the state licensing authority to provide a
23training program. Aend insert
training programbegin insert instituted and maintained
24by a licenseeend insert
shall be approved by the state licensing authority and
25shall include, but is not limited to, training on applicable
26begin delete substantive legalend deletebegin insert statutoryend insert requirements, industry best practices,
27occupational health and safety standards, andbegin delete individual
28organizational or company policies.end delete
begin insert workplace protections.end insert

29(b) (1) Each state licensing authority shall adopt standards for
30the approval of training programsbegin delete and eachend deletebegin insert instituted and
31maintained by a licensee and standards for the approval of
32third-end insert
begin insertparty providers of training programs. Eachend insert state licensing
33authority shall be responsible for approving and regulating training
34programsbegin insert and third-party providers of training programsend insert relevant
35to their licensees.

36(2) A state licensing authority shall not approve a training
37program provided, or proposed to be provided, by or through an
38apprenticeship program approved by the Chief of the Division of
39Apprenticeship Standards.

begin insert

P8    1
(3) A state licensing authority may approve a workplace training
2organization as a third-party provider. For purposes of this
3paragraph, a “workplace training organization” is a labor union
4organization in good standing representing wage earners or
5salaried employees for mutual aid and protection and for dealing
6collectively with cannabis employers.

end insert

7(c) A state licensing authority shall revoke the license of any
8licensee that fails tobegin delete institute or maintainend deletebegin insert implementend insert a training
9programbegin delete approved pursuant toend deletebegin insert as required byend insert thisbegin delete section.end deletebegin insert section
10within one year of the licensee’s obtaining a license.end insert

11(d) (1) Each state licensing authority shall charge each training
12programbegin insert instituted and maintained by a licenseeend insert a fee to cover
13costs incurred for approving the training program pursuant to this
14section.begin insert Each state licensing authority shall charge each
15third-party provider of training programs a fee to cover costs
16incurred for approving the third-party provider pursuant to this
17section.end insert
Revenues collected pursuant to this subdivision shall be
18deposited in the appropriate fee account within the Medical
19Marijuana Regulation and Safety Act Fund established pursuant
20to Sectionbegin delete 19350 of the Business and Professions Code.end deletebegin insert 19350.end insert
21 Total fees assessed shall not exceed the reasonable regulatory costs
22for training programbegin insert or third-party providerend insert approval. Each
23licensing authority may adjust fees as needed, but no more than
24once per year, to generate sufficient revenue to cover the costs of
25training programbegin insert and third-party providerend insert approval.

26(2) By July 1, 2018, revenue collected pursuant to this
27subdivision shall be projected to fairly and proportionately generate
28sufficient revenue to fully cover the costs of training programbegin insert and
29third-party providerend insert
approval.

30

SEC. 4.  

No reimbursement is required by this act pursuant to
31Section 6 of Article XIII B of the California Constitution because
32the only costs that may be incurred by a local agency or school
33district will be incurred because this act creates a new crime or
34infraction, eliminates a crime or infraction, or changes the penalty
35for a crime or infraction, within the meaning of Section 17556 of
36the Government Code, or changes the definition of a crime within
37the meaning of Section 6 of Article XIII B of the California
38Constitution.



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