Amended in Senate August 15, 2016

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 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 begin delete Marijuana end delete begin insert Cannabis end insert Regulation and Safety Act begin delete (MMRSA), end delete begin insert (MCRSA), end insert enacted by the Legislature, establishes within the Department of Consumer Affairs the Bureau of Medical begin delete Marijuana end delete begin insert Cannabis end insert Regulation, and provides for the state licensure and regulation of certain commercial begin delete medical marijuana end delete begin insert cannabis end insert activities by the begin delete Department of Consumer Affairs, end delete begin insert bureau, end insert the Department of Food and Agriculture, or the State Department of Public Health, as specified. begin delete MMRSA end delete begin insert MCRSA end insert 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. begin delete MMRSA end delete begin insert MCRSA end insert authorizes a state licensing authority to deny an application begin delete if specified conditions are met, end delete begin insert or issue a conditional license under certain conditions, end insert 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 begin delete MMRSA, end delete begin insert MCRSA, end insert 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 begin delete programs. end delete begin insert programs and programs provided by a licensee under MCRSA, except as specified. end insert 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 begin delete Marijuana end delete begin insert Cannabis end insert 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:

SECTION 1.  

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

19322.  

(a) A person shall not submit an application for a state
license issued by a licensing authority pursuant to this chapter
unless that person has received a license, permit, or authorization
from the 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, testing, transporter, or dispensary license, provide
a statement from the owner of real property or their agent where
the cultivation, distribution, manufacturing, testing, transport, or
dispensing of commercial medical cannabis activities will occur,
as proof to demonstrate the landowner has acknowledged and
consented to permit cultivation, distribution, manufacturing, testing,
transport, 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 valid 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) Pay all applicable fees required for licensure by the
licensing authority.

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

(b) For applicants seeking licensure to cultivate, distribute,
manufacture, test, or dispense medical cannabis or medical
cannabis products, 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.

(6) Security protocols.

(c) On and after July 1, 2018, an applicant with 20 or more
employees shall 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.

SEC. 2.  

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

19323.  

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

(b) A licensing authority may deny an application for licensure
or renewal of a state license, or issue a conditional 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) The applicant has failed to provide information required by
the licensing authority.

(4) 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.

(5) 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.

(6) 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.

(7) 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 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.

(8) 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.

(9) The applicant or any of its officers, directors, owners,
employees, or authorized agents have failed to comply with any
operating procedure required pursuant to subdivision (b) of Section
19322.

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

(c) On and after July 1, 2018, the licensing authority shall deny
an application of an applicant with 20 or more employees unless
the 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.

SEC. 3.  

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

19326.5.  

(a) A licensee shall implement an employee training
program to educate, inform, and train the licensee’s employees on
compliance with this chapter. A licensee may employ or contract
with a third-party provider to provide the employee training
program. An employee training program 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 licensing authority shall adopt standards for the
approval of employee training programs. Those standards shall
prohibit approval of an employee training program provided by
or through an apprenticeship program approved by the Chief of
the Division of Apprenticeship Standards. begin insert Those standards shall
also prohibit employee training programs provided by licensees
except when a licensee provides a training program to its own
employees. end insert

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

begin delete programs. end delete begin insert programs end insert begin insert ; however, a licensing authority shall not
approve a third-party provider of an employee training program
if the provider is a licensee, except as provided in paragraph (1). end insert

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

(d) Each licensing authority shall charge a fee for approving an
employee training program. Revenues collected pursuant to this
subdivision shall be deposited in the appropriate fee account within
the Medical begin delete Marijuana end delete begin insert Cannabis end insert Regulation and Safety Act Fund
established pursuant to Section begin delete 19350. end delete begin insert 19351. end insert Total fees assessed
shall not exceed the reasonable regulatory costs. Each licensing
authority may adjust fees as needed, but no more than once per
year, to generate sufficient revenue to cover the costs of employee
training program approval.

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

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.