Amended in Senate June 23, 2016

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 Bill No. 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 begin delete state end delete licensee to implement, as specified, begin delete a end delete begin insert an employee end insert training program for the licensee’s begin delete agents and end delete employees regarding compliance with MMRSA, as specified. The bill would require an applicant with 20 or more employees to begin delete include in an end delete begin insert attest on the end insert application begin delete for state licensure a detailed description of the training program end delete begin insert that end insert the applicant begin delete has implemented or end delete will begin delete implement, end delete begin insert implement an employee training program approved by the licensing authority within one year of licensure, as specified, end insert thereby modifying the crime of perjury and imposing a state-mandated local program. begin insert The bill would require the licensing authority to deny an application of an applicant with 20 or more employees unless the applicant makes the above-mentioned attestation on the application. end insert The bill would begin delete make the end delete begin insert require each end insert licensing authority begin delete responsible for approving and regulating the programs instituted and maintained by licensees and 3rd-party providers of the end delete begin insert to adopt standards for the approval of employee training end insert programs. The bill would prohibit the licensing authority from approving a program provided by or through certain apprenticeship programs. The bill would authorize the licensing authority to approve a workplace training organization, as defined, as a 3rd-party provider. begin delete The bill would require a state licensing authority to deny the application of an applicant that does not implement, or revoke the license of a state licensee that fails to implement within one year of obtaining a license, a program approved by the licensing authority or provided by an approved 3rd-party provider. end delete The bill would require each begin delete state end delete licensing authority to charge begin delete each training program instituted and maintained by a licensee a fee, as specified, to cover the costs for approving the training program. The bill would require each state licensing authority to charge each 3rd-party provider of end delete begin insert a fee for approving an employee end insert training begin delete programs a fee, as specified, to cover the costs for approving the 3rd-party provider. end delete begin insert program, as specified. end insert The bill would require that the fees collected be deposited in the appropriate account within the Medical Marijuana Regulation and Safety Act Fund. The bill would authorize each licensing authority to adjust fees as needed once a year to cover the costs of begin insert employee end insert training program begin delete and 3rd-party provider end delete approval. begin insert The bill would make these provisions operative on July 1, 2 end insert begin insert 018. 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:

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)  begin delete For applicants end delete begin insert On and after July 1, 2018, an applicant end insert with
20 or more begin delete employees, the application end delete begin insert employees end insert shall begin delete also include
a detailed description of the agent and employee training program
that the applicant has implemented, or will implement, pursuant
to Section 19326.5. A licensing authority shall not approve an
application unless the applicant’s training program or the
third-party provider of the applicant’s training program is approved
by the licensing authority. The licensing authority 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. end delete begin insert end insert begin insert attest on the application
that the applicant will implement an employee training program
approved by the licensing authority within one year of licensure,
pursuant to Section 19326.5. end insert

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 does 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)  begin delete The end delete begin insert On a end insert begin insert nd after July 1, 2018, the end insert licensing authority shall
deny an application begin insert of an applicant with 20 or more employees end insert
unless the begin delete agent and employee training program that the applicant
implements is approved by the licensing authority or provided by
an approved third-party provider pursuant to subdivision (c) of
Section 19322. end delete begin insert applicant attests on the application that the
applicant will implement an employee training program approved
by the licensing authority within one year of licensure, pursuant
to Section 19326.5. end insert

SEC. 3.  

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

19326.5.  

(a) A licensee shall implement begin delete a end delete begin insert an employee end insert training
program to educate, inform, and train the licensee’s begin delete agents and end delete
employees on compliance with this chapter. A licensee begin delete shall
implement a training program by either instituting and maintaining
a training program or hiring end delete begin insert may employ or contract with end insert a
third-party provider begin delete approved by the state licensing authority end delete begin insert end insert to
provide begin delete a end delete begin insert the employee end insert training program. begin delete A end delete begin insert An employee end insert training
program begin delete instituted and maintained by a licensee shall be approved
by the state licensing authority and end delete shall include, but is not limited
to, training on applicable statutory requirements, industry best
practices, occupational health and safety standards, and workplace
protections.

(b) (1) Each begin delete state end delete licensing authority shall adopt standards for
the approval of begin insert employee end insert training begin delete programs instituted and
maintained by a licensee and standards for the approval of
third-party providers of training programs. Each state licensing
authority shall be responsible for approving and regulating training
programs and third-party providers of training programs relevant
to their licensees. end delete begin insert programs. Those standards shall prohibit
approval of a end insert begin insert n employee training program provided by a
third end insert begin insert -party provider that operates an apprenticeship program
approved by the Chief of the Division of Apprenticeship Standards. end insert

begin delete

(2) A state licensing authority 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.

end delete begin delete

(3) A state

end delete

begin insert (2) end insert begin insert   end insert begin insert A end insert licensing authority may approve a workplace training
organization as a third-party begin delete provider. end delete begin insert provider of an employee
training program end insert begin insert . end insert For purposes of this paragraph, a “workplace
training organization” is a labor union organization begin delete in good
standing end delete representing wage earners or salaried employees for
mutual aid and protection and for dealing collectively with cannabis
employers.

(c) A begin delete state end delete licensing authority shall revoke the license of any
licensee begin insert end insert begin insert with 20 or more employees end insert that fails to implement begin delete a end delete begin insert an
employee end insert training program as required by this section within one
year of begin delete the licensee’s obtaining a license. end delete begin insert licensure end insert

(d)  begin delete (1) end delete begin delete   end delete begin delete Each state end delete begin insert Each end insert licensing authority shall charge begin delete each
training program instituted and maintained by a licensee a fee to
cover costs incurred for approving the training program pursuant
to this section. Each state licensing authority shall charge each
third-party provider of training programs a fee to cover costs
incurred for approving the third-party provider pursuant to this
section. end delete begin insert a fee for approving an employee training program. end insert
Revenues collected pursuant to this subdivision shall be deposited
in the appropriate fee account within the Medical Marijuana
Regulation and Safety Act Fund established pursuant to Section
19350. Total fees assessed shall not exceed the reasonable
regulatory begin delete costs for training program or third-party provider
approval. end delete begin insert costs. end insert Each licensing authority may adjust fees as needed,
but no more than once per year, to generate sufficient revenue to
cover the costs of begin insert employee end insert training program begin delete and third-party
provider end delete approval.

begin delete

(2) By July 1, 2018, revenue collected pursuant to this
subdivision shall be projected to fairly and proportionately generate
sufficient revenue to fully cover the costs of training program and
third-party provider approval.

end delete begin insert

(e) This section shall become operative on July 1, 2018.

end insert

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.