Amended in Senate August 1, 2016

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 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 licensee to implement, as specified, an employee training program for the licensee’s employees regarding compliance with MMRSA, as specified. The bill would require an applicant with 20 or more employees to attest on the application that the applicant will implement an employee training program approved by the licensing authority within one year of licensure, as specified, thereby modifying the crime of perjury and imposing a state-mandated local program. 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. The bill would require each licensing authority to adopt standards for the approval of employee training 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. The bill would require each licensing authority to charge a fee for approving an employee training program, as specified. 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 employee training program approval. The bill would make these provisions operative on July 1, 2018.

(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:

P3    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 19322 of the end insertbegin insertBusiness and Professions
2Code
end insert
begin insert is amended to read:end insert

3

19322.  

(a) A person shall not submit an application for a state
4license issued by a licensing authority pursuant to this chapter
5unless that person has received a license, permit, or authorization
6from the local jurisdiction. An applicant for any type of state
7license issued pursuant to this chapter shall do all of the following:

8(1) Electronically submit to the Department of Justice fingerprint
9images and related information required by the Department of
10Justice for the purpose of obtaining information as to the existence
11and content of a record of state or federal convictions and arrests,
12and information as to the existence and content of a record of state
13or federal convictions and arrests for which the Department of
14Justice establishes that the person is free on bail or on his or her
15own recognizance, pending trial or appeal.

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

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

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

25(2) Provide documentation issued by the local jurisdiction in
26which the proposed business is operating certifying that the
27applicant is or will be in compliance with all local ordinances and
28 regulations.

29(3) Provide evidence of the legal right to occupy and use the
30proposed location. For an applicant seeking a cultivator, distributor,
31manufacturing, testing, transporter, or dispensary license, provide
32a statement from the owner of real property or their agent where
33the cultivation, distribution, manufacturing, testing, transport, or
34dispensing of commercial medical cannabis activities will occur,
35as proof to demonstrate the landowner has acknowledged and
36consented to permit cultivation, distribution, manufacturing, testing,
37transport, or dispensary activities to be conducted on the property
38by the tenant applicant.

P4    1(4) If the application is for a cultivator or a dispensary, provide
2evidence that the proposed location is located beyond at least a
3600-foot radius from a school, as required by Section 11362.768
4of the Health and Safety Code.

5(5) Provide a statement, signed by the applicant under penalty
6of perjury, that the information provided is complete, true, and
7accurate.

8(6) (A) For an applicant with 20 or more employees, provide
9a statement that the applicant will enter into, or demonstrate that
10it has already entered into, and abide by the terms of a labor peace
11agreement.

12(B) For the purposes of this paragraph, “employee” does not
13include a supervisor.

14(C) For purposes of this paragraph, “supervisor” means an
15individual having authority, in the interest of the licensee, to hire,
16transfer, suspend, lay off, recall, promote, discharge, assign,
17reward, or discipline other employees, or responsibility to direct
18them or to adjust their grievances, or effectively to recommend
19such action, if, in connection with the foregoing, the exercise of
20that authority is not of a merely routine or clerical nature, but
21requires the use of independent judgment.

22(7) Provide the applicant’s valid seller’s permit number issued
23pursuant to Part 1 (commencing with Section 6001) of Division 2
24of the Revenue and Taxation Code or indicate that the applicant
25is currently applying for a seller’s permit.

26(8) Provide any other information required by the licensing
27authority.

28(9) For an applicant seeking a cultivation license, provide a
29statement declaring the applicant is an “agricultural employer,” as
30defined in the Alatorre-Zenovich-Dunlap-Berman Agricultural
31Labor Relations Act of 1975 (Part 3.5 (commencing with Section
321140) of Division 2 of the Labor Code), to the extent not prohibited
33by law.

34(10) Pay all applicable fees required for licensure by the
35licensing authority.

36(11) Provide proof of a bond to cover the costs of destruction
37of medical cannabis or medical cannabis products if necessitated
38by a violation of licensing requirements.

39(b) For applicants seeking licensure to cultivate, distribute,
40manufacture, test, or dispense medical cannabis or medical
P5    1cannabis products, the application shall also include a detailed
2description of the applicant’s operating procedures for all of the
3following, as required by the licensing authority:

4(1) Cultivation.

5(2) Extraction and infusion methods.

6(3) The transportation process.

7(4) Inventory procedures.

8(5) Quality control procedures.

9(6) Security protocols.

begin insert

10
(c) On and after July 1, 2018, an applicant with 20 or more
11employees shall attest on the application that the applicant will
12implement an employee training program approved by the licensing
13authority within one year of licensure, pursuant to Section 19326.5.

end insert
14begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 19323 of the end insertbegin insertBusiness and Professions Codeend insert
15
begin insert is amended to read:end insert

16

19323.  

(a) A licensing authority shall deny an application if
17the applicant or the premises for which a state license is applied
18does not qualify for licensure under this chapter or the rules and
19regulations for the state license.

20(b) A licensing authority may deny an application for licensure
21or renewal of a state license, or issue a conditional license, if any
22of the following conditions apply:

23(1) Failure to comply with the provisions of this chapter or any
24rule or regulation adopted pursuant to this chapter,begin delete includingend delete
25begin insert including,end insert but not limited to, any requirement imposed to protect
26natural resources, instream flow, and water quality pursuant to
27subdivision (a) of Section 19332.

28(2) Conduct that constitutes grounds for denial of licensure
29pursuant to Chapter 2 (commencing with Section 480) of Division
301.5.

31(3) The applicant has failed to provide information required by
32the licensing authority.

33(4) The applicant or licensee has been convicted of an offense
34that is substantially related to the qualifications, functions, or duties
35of the business or profession for which the application is made,
36except that if the licensing authority determines that the applicant
37or licensee is otherwise suitable to be issued a license and granting
38the license would not compromise public safety, the licensing
39authority shall conduct a thorough review of the nature of the
40crime, conviction, circumstances, and evidence of rehabilitation
P6    1of the applicant, and shall evaluate the suitability of the applicant
2or licensee to be issued a license based on the evidence found
3through the review. In determining which offenses are substantially
4related to the qualifications, functions, or duties of the business or
5profession for which the application is made, the licensing authority
6shall include, but not be limited to, the following:

7(A) A felony conviction for the illegal possession for sale, sale,
8manufacture, transportation, or cultivation of a controlled
9substance.

10(B) A violent felony conviction, as specified in subdivision (c)
11of Section 667.5 of the Penal Code.

12(C) A serious felony conviction, as specified in subdivision (c)
13of Section 1192.7 of the Penal Code.

14(D) A felony conviction involving fraud, deceit, or
15embezzlement.

16(5) The applicant, or any of its officers, directors, or owners, is
17a licensed physician making patient recommendations for medical
18cannabis pursuant to Section 11362.7 of the Health and Safety
19Code.

20(6) The applicant or any of its officers, directors, or owners has
21been subject to fines or penalties for cultivation or production of
22a controlled substance on public or private lands pursuant to
23Section 12025 or 12025.1 of the Fish and Game Code.

24(7) The applicant, or any of its officers, directors, or owners,
25has been sanctioned by a licensing authority or a city, county, or
26city and county for unlicensed commercial cannabis activities or
27has had a license revoked under this chapter in the three years
28immediately preceding the date the application is filed with the
29licensing authority.

30(8) Failure to obtain and maintain a valid seller’s permit required
31pursuant to Part 1 (commencing with Section 6001) of Division 2
32of the Revenue and Taxation Code.

33(9) The applicant or any of its officers, directors, owners,
34employees, or authorized agents have failed to comply with any
35operating procedure required pursuant to subdivision (b) of Section
3619322.

37(10) Conduct that constitutes grounds for disciplinary action
38pursuant to this chapter.

begin insert

39
(c) On and after July 1, 2018, the licensing authority shall deny
40an application of an applicant with 20 or more employees unless
P7    1the applicant attests on the application that the applicant will
2implement an employee training program approved by the licensing
3authority within one year of licensure, pursuant to Section 19326.5.

end insert
begin delete
4

SECTION 1.  

Section 19322 of the Business and Professions
5Code
is amended to read:

6

19322.  

(a) A person or entity shall not submit an application
7for a state license issued by the department pursuant to this chapter
8unless that person or entity has received a license, permit, or
9authorization by a local jurisdiction. An applicant for any type of
10state license issued pursuant to this chapter shall do all of the
11following:

12(1) Electronically submit to the Department of Justice fingerprint
13images and related information required by the Department of
14Justice for the purpose of obtaining information as to the existence
15and content of a record of state or federal convictions and arrests,
16and information as to the existence and content of a record of state
17or federal convictions and arrests for which the Department of
18Justice establishes that the person is free on bail or on his or her
19own recognizance, pending trial or appeal.

20(A) The Department of Justice shall provide a response to the
21licensing authority pursuant to paragraph (1) of subdivision (p) of
22Section 11105 of the Penal Code.

23(B) The licensing authority shall request from the Department
24of Justice subsequent notification service, as provided pursuant to
25Section 11105.2 of the Penal Code, for applicants.

26(C) The Department of Justice shall charge the applicant a fee
27sufficient to cover the reasonable cost of processing the requests
28described in this paragraph.

29(2) Provide documentation issued by the local jurisdiction in
30which the proposed business is operating certifying that the
31applicant is or will be in compliance with all local ordinances and
32regulations.

33(3) Provide evidence of the legal right to occupy and use the
34proposed location. For an applicant seeking a cultivator, distributor,
35manufacturing, or dispensary license, provide a statement from
36the owner of real property or their agent where the cultivation,
37distribution, manufacturing, or dispensing commercial medical
38cannabis activities will occur, as proof to demonstrate the
39landowner has acknowledged and consented to permit cultivation,
P8    1distribution, manufacturing, or dispensary activities to be conducted
2on the property by the tenant applicant.

3(4) If the application is for a cultivator or a dispensary, provide
4evidence that the proposed location is located beyond at least a
5600-foot radius from a school, as required by Section 11362.768
6of the Health and Safety Code.

7(5) Provide a statement, signed by the applicant under penalty
8of perjury, that the information provided is complete, true, and
9accurate.

10(6) (A) For an applicant with 20 or more employees, provide
11a statement that the applicant will enter into, or demonstrate that
12it has already entered into, and abide by the terms of a labor peace
13agreement.

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

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

24(7) Provide the applicant’s seller’s permit number issued
25pursuant to Part 1 (commencing with Section 6001) of Division 2
26of the Revenue and Taxation Code or indicate that the applicant
27is currently applying for a seller’s permit.

28(8) Provide any other information required by the licensing
29authority.

30(9) For an applicant seeking a cultivation license, provide a
31statement declaring the applicant is an “agricultural employer,” as
32defined in the Alatorre-Zenovich-Dunlap-Berman Agricultural
33Labor Relations Act of 1975 (Part 3.5 (commencing with Section
341140) of Division 2 of the Labor Code), to the extent not prohibited
35by law.

36(10) For an applicant seeking licensure as a testing laboratory,
37register with the State Department of Public Health and provide
38any information required by the State Department of Public Health.

39(11) Pay all applicable fees required for licensure by the
40licensing authority.

P9    1(b) For applicants seeking licensure to cultivate, distribute, or
2manufacture medical cannabis, the application shall also include
3a detailed description of the applicant’s operating procedures for
4all of the following, as required by the licensing authority:

5(1) Cultivation.

6(2) Extraction and infusion methods.

7(3) The transportation process.

8(4) Inventory procedures.

9(5) Quality control procedures.

10(c) On and after July 1, 2018, an applicant with 20 or more
11employees shall attest on the application that the applicant will
12implement an employee training program approved by the licensing
13authority within one year of licensure, pursuant to Section 19326.5.

14

SEC. 2.  

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

16

19323.  

(a) The licensing authority shall deny an application
17if either the applicant or the premises for which a state license is
18applied does not qualify for licensure under this chapter.

19(b) The licensing authority may deny the application for
20licensure or renewal of a state license if any of the following
21conditions apply:

22(1) Failure to comply with the provisions of this chapter or any
23rule or regulation adopted pursuant to this chapter, including, but
24not limited to, any requirement imposed to protect natural
25resources, instream flow, and water quality pursuant to subdivision
26(a) of Section 19332.

27(2) Conduct that constitutes grounds for denial of licensure
28pursuant to Chapter 2 (commencing with Section 480) of Division
291.5.

30(3) A local agency has notified the licensing authority that a
31licensee or applicant within its jurisdiction is in violation of state
32rules and regulation relating to commercial cannabis activities,
33and the licensing authority, through an investigation, has
34determined that the violation is grounds for termination or
35revocation of the license. The licensing authority shall have the
36authority to collect reasonable costs, as determined by the licensing
37 authority, for investigation from the licensee or applicant.

38(4) The applicant has failed to provide information required by
39the licensing authority.

P10   1(5) The applicant or licensee has been convicted of an offense
2that is substantially related to the qualifications, functions, or duties
3of the business or profession for which the application is made,
4except that if the licensing authority determines that the applicant
5or licensee is otherwise suitable to be issued a license and granting
6the license would not compromise public safety, the licensing
7authority shall conduct a thorough review of the nature of the
8crime, conviction, circumstances, and evidence of rehabilitation
9of the applicant, and shall evaluate the suitability of the applicant
10or licensee to be issued a license based on the evidence found
11through the review. In determining which offenses are substantially
12related to the qualifications, functions, or duties of the business or
13profession for which the application is made, the licensing authority
14shall include, but not be limited to, the following:

15(A) A felony conviction for the illegal possession for sale, sale,
16manufacture, transportation, or cultivation of a controlled
17 substance.

18(B) A violent felony conviction, as specified in subdivision (c)
19of Section 667.5 of the Penal Code.

20(C) A serious felony conviction, as specified in subdivision (c)
21of Section 1192.7 of the Penal Code.

22(D) A felony conviction involving fraud, deceit, or
23embezzlement.

24(6) The applicant, or any of its officers, directors, or owners, is
25a licensed physician making patient recommendations for medical
26cannabis pursuant to Section 11362.7 of the Health and Safety
27Code.

28(7) The applicant or any of its officers, directors, or owners has
29been subject to fines or penalties for cultivation or production of
30a controlled substance on public or private lands pursuant to
31Section 12025 or 12025.1 of the Fish and Game Code.

32(8) The applicant, or any of its officers, directors, or owners,
33has been sanctioned by a licensing authority or a city, county, or
34city and county for unlicensed commercial medical cannabis
35activities or has had a license revoked under this chapter in the
36three years immediately preceding the date the application is filed
37with the licensing authority.

38(9) Failure to obtain and maintain a valid seller’s permit required
39pursuant to Part 1 (commencing with Section 6001) of Division 2
40of the Revenue and Taxation Code.

P11   1(c)  On and after July 1, 2018, the licensing authority shall deny
2 an application of an applicant with 20 or more employees unless
3the applicant attests on the application that the applicant will
4implement an employee training program approved by the licensing
5authority within one year of licensure, pursuant to Section 19326.5.

end delete
6

SEC. 3.  

Section 19326.5 is added to the Business and
7Professions Code
, to read:

8

19326.5.  

(a) A licensee shall implement an employee training
9program to educate, inform, and train the licensee’s employees on
10compliance with this chapter. A licensee may employ or contract
11with a third-party provider to provide the employee training
12program. An employee training program shall include, but is not
13limited to, training on applicable statutory requirements, industry
14best practices, occupational health and safety standards, and
15workplace protections.

16(b) (1) Each licensing authority shall adopt standards for the
17approval of employee training programs. Those standards shall
18prohibit approval of an employee training program provided bybegin delete a
19third-party provider that operatesend delete
begin insert or throughend insert an apprenticeship
20program approved by the Chief of the Division of Apprenticeship
21Standards.

22(2) A licensing authority may approve a workplace training
23organization as a third-party provider of an employee training
24program. For purposes of this paragraph, a “workplace training
25organization” is a labor union organization representing wage
26earners or salaried employees for mutual aid and protection and
27for dealing collectively with cannabis employers.begin insert A licensing
28authority shall not be limited to approving workplace training
29organizations as thirdend insert
begin insert-party providers of employee training
30programs.end insert

31(c) A licensing authority shall revoke the license of any licensee
32with 20 or more employees that fails to implement an employee
33training program as required by this section within one year of begin delete34 licensureend delete begin insert licensure.end insert

35(d) Each licensing authority shall charge a fee for approving an
36employee training program. Revenues collected pursuant to this
37subdivision shall be deposited in the appropriate fee account within
38the Medical Marijuana Regulation and Safety Act Fund established
39pursuant to Section 19350. Total fees assessed shall not exceed
40the reasonable regulatory costs. Each licensing authority may adjust
P12   1fees as needed, but no more than once per year, to generate
2sufficient revenue to cover the costs of employee training program
3approval.

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

5

SEC. 4.  

No reimbursement is required by this act pursuant to
6Section 6 of Article XIII B of the California Constitution because
7the only costs that may be incurred by a local agency or school
8district will be incurred because this act creates a new crime or
9infraction, eliminates a crime or infraction, or changes the penalty
10for a crime or infraction, within the meaning of Section 17556 of
11the Government Code, or changes the definition of a crime within
12the meaning of Section 6 of Article XIII B of the California
13Constitution.



O

    93